The warning comes on the eve of the first tentative steps towards graduated VED, with vehicles under 1.1-litres offered a £55 cut in road tax to £100 from Tuesday. The next step will be to base VED charges on CO2 from next year, and this week, the Treasury insisted the department was on target for creating the new tax and dismissed allegations that the Government might consider a U-turn.
News that the plans for graduated VED are in trouble will not surprise many fleet managers who have been vocal in their opposition to the scheme ever since the idea was introduced last year to encourage the use of smaller, more fuel-efficient cars. They branded the Chancellor of the Exchequer's ideas as 'muddled and contradictory' and highlighted gaping holes in policy which have still to be filled, including the treatment of alternatively fuelled vehicles and the lack of any useful policy on vans.
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