Fleet News

Chancellor sends 'green and clean' message

FLEETS were sent a powerful 'clean and green' message by Chancellor of the Exchequer Gordon Brown in Tuesday's Budget. Amid widespread industry fears that the Budget could spell the end of the road for the company car, the Chancellor focused his motoring attack on encouraging the widespread introduction of gas-powered vehicles and the use of small, clean and fuel-efficient vehicles.

However, while there were sighs of relief from within the fleet industry that the Chancellor had not tampered with company car tax and had not introduced a tax on company-provided car parking spaces, there were immediate warnings from the fleet industry that the forthcoming May transport white paper could contain such proposals.

Within minutes those fears were proved right as the Inland Revenue announced that the white paper would contain proposals for replacing the existing 2,500 and 18,000 business mileage discounts with discounts for driving fewer private miles in company cars, coupled with measures designed to penalise the provision of free fuel for private journeys.

WITHIN 90 minutes of the Chancellor sitting down leaded petrol increased in price by 4.9p a litre/22.3p a gallon, unleaded petrol and low-sulphur diesel increased in price by 4.4p a litre/20p a gallon and ordinary diesel increased by 5.5p a litre/25p a gallon.

That means the fuel bill for a typical 100-car unleaded petrol-engined fleet averaging 32mpg and clocking up 18,000 miles a vehicle per year will rise by £11,220 a year and for an equivalent diesel fleet returning 39.65 mpg the fuel bill will increase by £11,349, according to PHH Vehicle Management Services.

THE Chancellor gave the clearest signal yet that companies should introduce gas-powered vehicles to fleets by freezing duty on gaseous road fuels and by announcing that the typical £1,500 charge for converting a petrol-engined car to gas power should be ignored for benefit-in-kind tax purposes.

The average company car driver who has a fully-expensed car will pay an extra £1 a week in tax for the provision of private fuel through increases in scale charges.

THE Chancellor announced that from January next year vehicle excise duty for small and clean vehicles would be cut by £50 to £100.

In addition there would be no increase in the £150 road fund licence which would cost the Treasury £145 million a year.

AS the Government continues its crusade to encourage the widespread use of public transport the Chancellor announced that over the next three years an additional £500 million would be pumped into public transport with Deputy Prime Minister John Prescott due to announce details this week.

In addition £50 million would be ploughed into a rural transport fund.

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