David Cameron is drawing up plans to help motorists with tax breaks or subsidies for “really fuel efficient” cars – and a further block on future rises in duty on petrol.
The Prime Minister said that the Government has “got to do more” to encourage the spread of the next generation of electric hybrid cars, which are now becoming realistic alternatives to traditional vehicles.
Speaking during the local election campaign in Derbyshire today, he also pledged to “keep going” to block future fuel duty rises.
It is now understood to be unlikely that there will be any duty rises before the next general election in 2015, unless petrol prices fall sharply.
In the run-up to the next election, Mr Cameron will focus on measures to tackle the soaring cost of living in Britain, which is now seen as the key political issue.
Official statistics to be released this week are expected to show that economic growth is slowly increasing. However, there is a concern among Conservative strategists that voters will not notice the economic recovery as the cost of living continues to rise, while wages stagnate.
Mr Cameron said: “The truth is this, when we got in, the previous government had set out a whole lot of plans for fuel duty increases. It was like a whole lot of unexploded bombs which we have had to try and defuse.”
“We have cancelled and delayed almost all of these fuel duty increases. We even cut fuel duty on one occasion. We will keep going to try and keep those fuel duty increases off, recognising that it is the really big bills that people really care about and want help with.”
However, with oil prices forecast to remain at record levels, Mr Cameron is also keen to introduce incentives to encourage motorists to switch to electric vehicles.
He said that regardless of a freeze on fuel duty, “you’ve still got international oil price rises, the price at the pump is still very high”.
“We’ve still got to do more to encourage really fuel efficient cars,” he said. “We’ve got to make sure the new generation of electric, hybrid cars come through.
“They are beginning to produce electric cars that can go a serious distance and actually then you are paying £5 or £10 a week to charge them, rather than a really high price at the pumps.”
Mr Cameron did not specify what extra incentives he may offer to encourage more green motoring although it is likely to involve making the vehicles cheaper than their traditional counterparts.
The last Labour government introduced a fuel duty escalator in its final budget which involved increasing the tax on petrol and diesel by a penny per litre above inflation until at least 2014-15.
The Coalition has already blocked 13 pence worth of rises on fuel, at a cost of about £6 billion to the Exchequer. Further rises of at least 4p or 5p per litre would be expected before the next election without renewed action.