No Swappage scheme but welcome relief that motor tax and fuel prices unchanged

There was an air of disappointment in the motor industry after the Government opted against the introduction of a so-called “swappage” scheme to stimulate the new car market in yesterday’s Budget.

"It's hugely disappointing given that we have worked hard to produce a well-costed proposal," according to Alan Nolan, director general of Society of the Irish Motor Industry.

There had been a significant campaign led by the Society of the Irish Motor Industry calling for its introduction. Under the proposed scheme buyers who trade in a car six years or older - registered in 2008 or earlier - will get a €2,000 reduction in the Vehicle Registration Tax (VRT) on their new car.

If there was good news for motorists from the Budget it was that the Government left motor tax and fuel prices as they were. “It was a strange budget,” saidConor Faughnan, director of consumer affairs at AA Ireland.

“We are pleased that our arguments on fuel taxes were listened to and that while things did not get better at least they did not get any worse. We had warned that there have been five separate increases in both petrol and diesel since the emergency budget of October 2008 which between them have added 23 cent to the retail price of both fuels. This continues to hurt businesses and ordinary families. There really was no scope for further increases.”

There was concern expressed last night about the fact there was no mention of an extension to the current VRT reliefs for electric and hybrid vehicles. Mr Nolan said it would be an "appalling decision" to bring these reliefs to an end, effectively discarding the substantial investments already made on the new technologies by the motor industry, the ESB and the multiple small firms that have been working on electric vehicle development.

The VRT reliefs currently in place for electric vehicles (up to €5,000), plug-in hybrid electric vehicles (up to €2,500), and hybrid and flexible fuel vehicles (up to €1,500) come to an end on December 31st 2013.

However a spokesman for the Department of Finance said the reliefs are a Finance Bill issue and nothing should be read into the fact that they were not mentioned in the Minister's speech.