Fleet News

Industry speculates over graduated vehicle excise duty in spring Budget

SPECULATION is mounting that the Government may introduce a system of graduated vehicle excise duty in the spring Budget. Amid increasing speculation surrounding the Budget and possible measures which could impact on the motor industry and particularly the company car, graduated vehicle excise duty is claimed to be emerging as the favourite measure in Whitehall.

Following record fleet sales last year leading fleet manufacturers were united this week in predicting a year of consolidation in the market with sales little changed on the 1,018,491 units sold last year with the 'wild card' being the impact of any Budget measures. In the wake of last week's announcement that Jaguar is to build its new small car on Merseyside and Toyota's decision this week to invest £150 million at its North Wales engine plant, 'new Labour' faces a major dilemma.

Alan Pulham, director of the franchised dealers arm of the Retail Motor Industry Federation, said: 'The Government is in a difficult position. It is clearly intent on curbing car use, but the difficulty is that it is not something it can do very quickly and clearly it must support the industry.' The Society of Motor Manufacturers and Traders said graduated vehicle excise duty would be on the Government's agenda. The organisation is opposed to the measure claiming it would distort the market while delivering only minimal benefits.

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