Fleet News

Brown puts fleet industry 'in a coma'

THE Government has been accused of placing the fleet industry in a 'coma' by its announcement that it will make decisions on the increases in fuel duty 'Budget by Budget'. Many companies have given a cautious welcome to the Chancellor's relaxed stance on the annual fuel tax escalator, fearful that it may be a sop to the industry in advance of tougher legislation in the March 2000 Budget.

Keith Greenhead, director of the fuel division at PHH Vehicle Management which operates Britain's number one fuel card, the PHH AllStar card, said: 'Brown's statement does not mean that fuel prices won't go up, but that we won't now know by how much it's going to go up by. Instead of being subjected to a terminal heart attack, we are being slowly placed into a coma. The worst we can expect is that there will be further price increases and the best that we will be stuck with the highest fuel prices in Europe.'

On Brown's promise that the revenue from real term increases in road fuel duties will be ring-fenced for spending on improving the road and public transport infrastructure, Greenhead accused the Government of taking a warped view of investment. 'What the Government is saying is that we will have to accept paying for over-taxed petrol, while the money is placed in this transport pot for an indiscernible amount of time with the expectation that the roads and public transport system will be improved,' said Greenhead.

Jeff Wood, managing director of new fleet management firm Compact Vehicle Solutions, is concerned that while the relaxed stance towards increasing fuel tax is to be welcomed it could presage harsher taxes to come. He believes the industry shouldn't be lulled into a false sense of security that since, as Brown claimed, the escalator can be abolished because it has achieved its goal to reduce the £28 billion deficit the Labour Government inherited from the previous administration, that future legislation on graduated Vehicle Excise Duty and benefit-in-kind tax will not be hard-hitting.

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