Transport minister Norman Baker says that yesterday’s announcement by the chancellor stating support for the manufacture of ultra-low emission vehicles in Britain underlines the Government’s commitment to the sector.

Baker said: “This Government is committed to ensuring the UK is world leader in ultra-low emission vehicle, and the measures announced in the Budget today underline this long-term commitment.

“If we want to secure the jobs and wider economic benefits from these vehicles being designed and built in the UK, then the UK itself needs to be a centre of early demand.

“The measures the Chancellor has announced could save ultra-low emission motorists thousands in tax compared to driving an equivalent petrol vehicle.

“Coupled with exceptionally low running costs and the other support that we are already providing, this helps to make these vehicles an attractive alternative to their conventional counterparts.

“The Government will contribute up to three-quarters of the cost of installing charge points at people’s homes and is also funding a network of on-street chargepoints across the country.

“Sales of plug-in vehicles are picking up as people come to see the economic and environmental sense they make, and with further exciting new vehicles coming to the UK over the next few months from the world’s largest car manufacturers, we are confident there will be strong future growth.”

The changes will introduce two new company car tax (CCT) bands with reduced rates for ultra-low emission cars from 2015-16. 

The appropriate percentage of a car’s list price subject to tax in 2015-16 will be 5% for cars emitting 0-50gCO2/km and 9% for cars emitting 51-75gCO2/km.   

A basic rate taxpayer driving a zero emission car with a list price of approximately £28,500 could pay £470 less CCT than a basic rate taxpayer with a conventionally fuelled car that emits between 115-119 CO2g/km with a list price of approximately £18,000. A higher rate taxpayer would pay £940 less in 2015-16.

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