Green tax 'will add £1000 to cost of motoring' for families

A Government-commissioned review is expected to suggest a carrot and stick approach to make people switch to more environmentally-friendly vehicles when it reports back in February.

Recommendations are expected to include higher purchase tax and road tax for high-emission vehicles which could add £1,000 to a motorist's costs, the Times reported.

Julia King, Vice-Chancellor of Aston University, who is leading the review, told the newspaper: "We need both carrots and sticks.

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"In choosing cars, price is the absolute top of the list. Levels of increases of £1,000 to £1,500 seem to have a big effect on consumer behaviour."

Professor King said she was particularly keen to look for ways to influence the purchase of company cars which account for more than half of new car sales.

The report is also expected to suggest grants for people who opt for cars powered by alternative fuels or fitted with devices to reduce fuel consumption.

There are also likely to be recommendations for incentives for manufacturers to hasten the introduction of electric cars or hybrids which have a petrol engine and an electric motor.

Professor King believes there should be a gradual shift towards cars powered by rechargeable electric batteries which can be charged overnight.

She said she was sceptical of biofuels made from crops as a "green" alternative to existing fuels, saying their cultivation was accelerating the destruction of the rainforest and pushing up food prices.

She added that hydrogen was problematic as a fuel as it would be difficult to produce and transport and also produces high carbon dioxide emissions.

"There is no point having hydrogen until we have found a way of making it without high emissions," she said.

The review is looking for recommendations which will aim to reduce the amount of carbon dioxide that the average car emits per mile by at least 30% within the next 10 years.

A Treasury spokesman said: "Professor King has been asked to advise the government on potential advances in technology that might improve the efficiency of vehicles.

"Her report is not due until next year. The government will consider her recommendations on potential technological improvements then."

He said Professor King had not been asked to look at tax issues.