THE Government will admit that future new car price comparisons which will reveal UK vehicles to still being more expensive than their continental Europe equivalents are due to currency fluctuations and tax issues and not 'Rip-off' Britain.

Minister for Competitiveness Alan Johnson has applauded manufacturers for reducing new car prices in the run-up to and in the aftermath of the Government's publication of the Supply of New Cars Order 2000 in the summer.

He told the Guild of Motoring Writers' annual Chairmen and Chief Executives' Lunch in London on Thursday: 'I am pleased that competition is being sharpened and keener prices are being offered to deliver real results.'

The next twice yearly new car price survey by the European Commission - due to be published in February next year - will reveal that, despite the price cuts by manufacturers, new cars continue to remain massively more expensive in the UK than on the continent.

But Johnson said the Government was 'sophisticated enough' to understand that such differences were due to currency fluctuations and different vehicle tax regimes in the Euro zone.

'It will be an argument about the Euro and the weakness of the Euro rather than the strength of Sterling,' said Johnson. 'It is something we find very difficult to handle. The arguments will resurface about the single currency; they will not be about new car pricing.'