Fleet News

Shadow Treasury heads for showdown on gas power

THE Conservative Party's shadow Treasury team is heading for a showdown with the Government over the Vehicle Excise Duty charged on gas-powered cars. In the run-up to the Commons debate on the 1999 Budget, John Whittingdale MP (Con. Maldon) has asked the Department of the Environment, Transport and the Regions to estimate the cost of reducing VED on gas-fuelled vehicles to £20.

This is not currently a plank in the Conservatives' transport platform but could be used to score political points against a Government committed to 'green' travel initiatives. Transport minister Glenda Jackson said DVLA showed there were 2,669 licensed gas vehicles at December 31, 1998. Of these, 420 were licensed in exempt classes while the large majority of the rest were private or lights goods vehicles or agricultural machinery.

'We therefore estimate that the revenue cost of reducing vehicle excise duty to £20 on these vehicles would be substantially less than £1million,' said Jackson. 'However, the Government is encouraging the switch to gas and other low-pollutant fuels and we would expect the number of gas-powered vehicles to increase significantly in the future.'

Any change to VED rates would have to wait for the Budget next March but the move to a graduated system based on carbon dioxide emissions from autumn 2000 will fuel a debate that gas-powered cars should qualify for the cheapest rate because of their clean exhaust emissions, even if they do not produce the lowest levels of CO2.

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