LONDON - British finance minister Alistair Darling announced plans on Wednesday to support new low carbon industries, cut gas emissions from homes and boost the embryonic electric car sector.
Keen to burnish the government's green credentials, Darling scrapped taxes on company electric cars for the next five years.
There are currently only about 50 electric company cars on the road out of a fleet of roughly 1.1 million and the hope is such an incentive will encourage businesses to buy more.
Firms currently pay National Insurance contributions and employees pay income tax based on the cost of company cars and their CO2 emissions. The range varies from nine percent for electric cars to 10-35 percent for fossil fuel cars.
The chancellor also announced 100 percent first year capital allowances for electric vans, in a bid to boost uptake in that sector.
The Society of Motor Manufacturers and Traders (SMMT) welcomed the initiative. SMTT's chief executive, Paul Everitt, said help could not have come at a better time as 2010 will be another extremely difficult year for the UK motor industry.
On energy efficiency, Darling said he would build on the
the successful car scrappage scheme by helping to replace older inefficient boilers in 125,000 homes across the country.
We must all become more energy-efficient and cut emissions, as well as household bills, he said.
The government and the car industry have been jointly funding a scheme to encourage car owners to trade in older models and buy new cars that pollute less.
Obsolete domestic boilers add over 200 pounds ($326.7) to household bills and 1 tonne of carbon to the atmosphere each year, Darling said.
He also announced extra funding for new low carbon industries.
From next April, Darling said that people with home wind turbines or solar panels who generate excess electricity for the national grid will receive 900 pounds a year tax free.
Darling pledged to invest 160 million pounds across a range of low carbon public and private projects through existing schemes -- along with 90 million pounds earmarked for green European infrastructure schemes.
He also said the government would double its commitment to carbon capture and storage, by supporting four new projects with technology that captures CO2 and stores it underground.
(Reporting by Stefano Ambrogi; Editing by Keith Weir)