UK Transport Secretary Philip Hammond confirmed today that motorists will receive up to £5,000 (US$7,800) towards purchase of an ultra-low carbon car from January 2011. The consumer grant will reduce the up-front cost of eligible vehicles by 25%, capped at £5,000. Available across the UK, it will be open to both private and business fleet buyers.

The Government announced this incentive ahead of the completion of the spending review to support the early market for ultra-low carbon cars. While the remains committed to reducing the UK’s budget deficit, it said it understands the need for certainty for investors who are taking long term decisions now on where to launch ultra low carbon vehicles and where to locate future production.

The coalition Government is absolutely committed to low carbon growth, tackling climate change and making our energy supply more secure. We are sending a clear signal that Britain is open for business and that we are committed to greening our economy. This will ensure that the UK is a world leader in low emission vehicles.

We will review the level of the incentive regularly to ensure that the UK remains competitive and taxpayers get value for money. The first review will be in January 2012, at which point we will set the level for subsequent years.

—Transport Secretary Philip Hammond

The level of the consumer incentive has been agreed until 31 March 2012. The level will be reviewed in January 2012. After taking into consideration a number of key factors such as the costs of vehicles and the development of the early market, the level will then be set for subsequent years.

£43 million (US$67 million) has been made available up to the end of March 2012. The final budget beyond 2011/12 will be confirmed at the spending review.

Any car eligible for subsidy will have demonstrated compliance against safety and performance criteria. These criteria will be published shortly at