Government says it's sticking with CO2 regime

THE Government remains committed to introducing a carbon dioxide emission-based Vehicle Excise Duty regime in autumn 2000 despite reports that the plans are falling apart at the seams. As the £100 VED charge for vehicles with an engine of 1,100cc or less was introduced on June 1 - a £55 cut in the VED rate - the Government emphasised that it was still on track to introduce a completely overhauled system.

Economic Secretary to the Treasury, Patricia Hewitt, said: 'The cut is only the first step in a major reform of the VED system. From autumn 2000, a completely new system will be introduced for new cars, where owners will pay according to their car's rate of CO2 emissions. 'And junior transport minister Lord Whitty said: 'This is the first part of the wider move to align the VED structure to support the Government's environmental policy. The Driver and Vehicle Licensing Agency will work with the motor industry on changes required for the registration and licensing of vehicles under the new arrangements.'

Despite the Government's reassurances, it is understood that the proposed new system is in crisis. Because of the behind-the-scenes work needed to be completed prior to the planned launch date, fears are understood to be mounting that, unless decisions on the shape of the new system are made almost immediately, the deadline will not be met.