My hon. Friend raises a good point. It is not just that people have paid less tax because they and the Government believed that their vehicle was emitting less. Those people were also sold vehicles that did not achieve the emissions levels that the manufacturer said they did, which raises the question of whether not only the Government but the individual motorists who bought those cars are entitled to some compensation. I suspect that some cases will end up in the courts, and it will be interesting to see what the courts have to say about them.
The Government should particularly consider targeting a scrappage scheme at poorer households and those that earn less than 60% of the median UK household income. They could taper support, with lower-income households entitled to a higher level of support for exchanging their vehicles.
My third proposal for a new scrappage scheme is that it should be targeted. I would limit it to the 5.6 million diesel cars on British roads that were registered before 2005, which are on Euro standards 1, 2, 3 and 4 and have higher NOx levels of at least 0.25 mg per km. This would complement current clean air zone plans to charge vehicles of Euro 4 standard and below, as well as the London T-Charge that will begin this October. A scrappage scheme would give diesel owners the chance to replace their older, dirtier vehicles before clean air zone charging is implemented, which is quite important.
Another option would be to geographically target the scheme at this country’s pollution hotspots. The think tank IPPR—the Institute for Public Policy Research—has estimated that there are around 900,000 Euro 4 or older diesel vehicles in the 16 top pollution hotspots in the country. By creating a targeted scrappage scheme, the Government could help to remove more than half the dirtiest vehicles from the worst polluting hotspots.
My fourth proposal relates to funding. The previous scrappage scheme in 2009 was targeted at cars that were more than 10 years old. A vehicle could be scrapped in exchange for a £2,000 discount—£1,000 from the Government and £1,000 from car manufacturers. I propose that a new scrappage scheme could follow a similar model. Funding should also be capped and time-limited, like the last scheme, which set deadlines of February 2010 or £400 million, whichever was achieved first. If the Government earmarked £500 million for the scheme, that could take nearly 10% of the 5 million dirtiest diesel vehicles off our roads. Evidence from the previous scheme shows that it was generally the oldest and therefore more polluting cars that were being replaced. Moreover, past schemes have generally brought forward investment decisions.
I know that Ministers have baulked at the costs of a scrappage scheme, but they should not be put off. It need not be an open-ended funding commitment. A targeted scheme capped at £500 million would be a real tonic to get dirty diesels off the road quickly. Even better, they would be replaced with ultra-low emission vehicles or a clean transport option. The Government still have vast air quality problems and the last thing we want is for them to end up having to pay fines. It would be better to go forward with something positive.
I will finish with two thoughts. The Secretary of State for Environment, Food and Rural Affairs has called air quality her Department’s top priority. The Secretary of State for Business, Energy and Industrial Strategy has said that electric vehicles are at the heart of the Government’s new industrial strategy. I cannot think of a policy that would better target both of those aims. A targeted, means-tested scrappage scheme in which diesel vehicles could be swapped for an ultra-low emission vehicle or a cleaner transport option should be a key weapon in the Government’s armoury for tackling air pollution. It would be the perfect complement to the new clean air zones strategy. I look forward to hearing from the Minister and other colleagues.