A scrappage scheme for diesel cars could be introduced within months as part of a plan to lower emissions and improve air quality across the country.
Work is underway by officials in the Department for Transport and Defra on a scheme to offer cashback or a discount on low emission cars if people trade in their old polluting vehicles.
A Government source confirmed that talks have taken place with the Treasury, which would finance the plan, and officials are developing a scheme which could focus on geographical areas around the country where pollution is worst.
Chris Grayling, the Transport Secretary, reportedly told industry experts that he supports plans for a scrappage scheme during a private meeting earlier this month, but that it must be properly targeted.
It came as Mr Grayling said high pollution levels are something ministers "have to deal with now".
He told the House of Commons: "We have to find the right way to migrate the nature of the cars on our roads and the vehicles on our roads to a point where they cause much less of a pollution problem than they do at the moment."
An industry source confirmed Mr Grayling spoke of his support for a scrappage scheme at a private meeting two weeks ago where the MP also committed to an expansion of electric cars and charging points for the technology.
The oldest and most polluting diesel vehicles in areas where emissions levels are particularly high are likely to be the target.
It follows a dramatic warning earlier this month after a number of London boroughs recorded toxic air quality levels forcing the city's Mayor to call on people to stay indoors and put off exercise until the levels improved.
It also came as Westminster council introduced a 50 per cent surcharge on parking for diesel cars in a bid to drive them out of the borough.
Mr Grayling told the BBC: "The irony is that a decade ago, because of concerns about carbon emissions there was a drive towards diesel... that we now know has a different set of negative effects and the department for the environment is currently preparing, and will launch shortly, our strategy to take tackling the diesel problem to the next level.
"There is no question that in the future we are going to have to move to lower emission vehicles. We need to do it soon... I would like to see a migration of people away from current technologies to lower emission technologies. We are providing incentives to do that now and we will be doing more in the months ahead."
Former transport secretary Patrick McLoughlin suggested last year that the Treasury should rethink schemes that encourage people to buy diesel cars or increase taxes in order to deal with the problem.
Sources said George Osborne, the former Chancellor, was opposed to a diesel scrappage scheme but that Philip Hammond is more open to the idea if it can be proven to work.
MPs on the transport committee have also been in discussion with the Department for Transport about the viability of such a scheme.
One MP said: "The department is looking at this in a serious way but it simply won't go far enough to tackle the real problem of heavily polluting HGVs, farm vehicles and ships."
But campaigners and the car industry support the idea, which mirrors a scheme developed by the French Government to remove old diesel vehicles from the roads because of the high levels of pollution they emit.
Howard Cox, founder of the FairFuelUK Campaign, said: "The decision by Westminster Council to add 50 per cent to the cost of parking diesel vehicles is just greedy unscrupulous money grabbing using dubious emissions evidence as the reason to fleece hard-working motorists.
“There must be incentives for hard-pressed motorists of older diesels to want to change to EVs, hybrids or ultra-low emission vehicles, such as in the French approach. Punishing millions of diesel drivers for mistakes in past UK government policy is neither fair nor honest. There will be a cost in any scrappage scheme, but in the long term the economy and the environment will be the winners.”
A Treasury spokesman said: "The Government continues to keep all taxes under review and any changes are announced at fiscal events.”
While a Department for Transport spokesman said there are currently "no plans" to introduce a scrappage scheme.
Thanks to Daily Telegraph
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