Fleet News

VED plans a danger to UK businesses say MPs

TAX-based incentives for fleets to clean up their emissions, including the latest Vehicle Excise Duty proposals, have been attacked by opposition MPs in the House of Commons as a danger to fleets, the car industry and the country's prosperity. The Government has announced in its consultation document on Vehicle Excise Duty that it plans to offer £50 discounts for the cleanest, smallest vehicles, but the industry is demanding what taxation it has in store for the other end of the scale.

This could add significantly to fleet costs, already at risk of soaring as duty on fuel goes up by 6% above inflation every year as the Government tries to cut down on the mileage covered by drivers. Eric Forth, Conservative MP for Bromley and Chislehurst, in clashes with Transport Minister Dr John Reid, said: 'What estimate has he made of the impact that this enormous increase in duties will have on the inflation rate, our business competitiveness and the automobile and related trades?

'Does he agree that, even if he achieves the figures he has given, there is a distinct risk that the price in jobs, businesses and prosperity could be very high indeed.?' Reid said the Government was committed to working with the motor industry to encourage the production of more fuel-efficient engines with fewer emissions so extra fuel costs might not mean extra travel costs.

But Matthew Taylor, (Lib Dem, Truro and St Austell), rounded on Reid, saying the motorist deserved to see more investment in the roads and their welfare. 'Given that the last Conservative Government imposed some £25 billion in extra fuel duties on motorists and that the new Government's policies would impose another £9 billion, is it not time - if we are to sell the principle of environmental taxation - to give something back to the taxpayer?' he said.

Conservative MP for South-West Norfolk Gillian Shepherd also condemned the VED consultation, telling Reid it had been branded 'Carry on Consulting'. She added: 'When will he and the Secretary of State stop walking and talking and start making some decisions, or are they waiting for the Treasury to tell them what do again?'

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