SETS BRITAIN ON ROAD TO BETTER
TRANSPORT AND ENVIRONMENT
to boost the transport network and benefit the environment were set
out by Chancellor Gordon Brown today.
Budget 2000 will
help underpin the Integrated Transport strategy by providing additional
funding to improve the transport network, creating
incentives for cleaner vehicles, reducing
congestion and boosting the competitiveness of the UK haulage
for additional transport spending, a £55 cut in Vehicle Excise
Duty (VED) rates for 2.2 million smaller cars, and reductions of up
to £70 in the VED rates for 95 per cent of new cars are amongst
the measures announced by the Chancellor today.
FOR ROADS AND PUBLIC TRANSPORT
In his November
Pre-Budget Report, the Chancellor announced that he would consider
the appropriate rate of fuel duties on a Budget-by-Budget basis, taking
into account all the relevant economic, social and environmental factors.
Given the increase
in oil prices from $23 a barrel to $30 since the Pre-Budget Report,
the Chancellor has decided for this Budget that, other than the automatic
inflation rise of around 2 pence a litre, there will be no
increase in road fuel duties.
also recognised the case for investment in the road network and public
transport system, and has therefore made £280 million
available for additional transport expenditure across
the UK to tackle congestion hot-spots and modernise public transport.
Every region will benefit from new investment in its transport infrastructure.
The Deputy Prime Minister will shortly announce details of projects
this money will support.
FOR CLEANER CARS AND FUELS
Budget 2000 announces
a range of measures which will encourage the take-up of more environmentally-friendly
models of car, and ensure that the less cars pollute, the less tax
their owners will pay:
- a 1p per litre incentive for ultra low sulphur petrol to take effect from a target date of 1st October 2000; and
- a freeze
in duty on road fuel gas.
COMPETITIVENESS AND REDUCING CONGESTION
Budget 2000 contains a package of measures, including lorry VED cuts worth £45 million, designed to boost the competitiveness of UK hauliers while helping to relieve the road network from the damage and congestion which lorries can cause:
Gus Macdonald, Minister for Transport said:
"This Government is determined to deliver a better transport system and to protect the environment. Today's Budget shows we mean business.
"Today's additional investment supports the policies outlined in the Integrated Transport White Paper, and points the way towards July's Ten Year Transport Plan, which the Deputy Prime Minister has asked me to prepare. This will set out the long-term strategy and investment needed to deliver on our promises and build a modern integrated transport system.
"The DVLA will shortly be launching a publicity campaign to emphasise to motorists that driving a more fuel-efficient vehicle will cut their VED and fuel bills, as well as helping the environment.
announced to boost the competitiveness of UK hauliers show the value
of the work undertaken in the Road Haulage Forum over the past year
to consider these competitiveness issues. We will carry on this work
with the industry so that it can continue to inform the Government's
1. Rates of duty on petrol and diesel will increase in line with inflation from 6pm today. Duty on road fuel gases will be frozen. The new rates are set out in the table below, together with the effect of the total tax increase (duty plus VAT) on the price of a litre of petrol:
2. The Government
intends to introduce a 1 pence per litre incentive for ultra low sulphur
petrol from 1st October 2000. There will be consultation
with the industry and other interest groups on the exact specification
for this new, cleaner type of petrol and the exact date of introduction.
3. Details for
businesses are published in Budget Notice 62/2000 which is available
from Customs and Excise Advice Centres and from www.hmce.gov.uk
Excise Duty (VED) for existing cars
4. A reduced VED
rate for cars was announced in the last Budget and introduced on 1st
June 1999 for all cars with engines up to 1,100cc. This gave a £55
VED cut to drivers of around 1.8 million cars. Engine size is the
best available proxy for measuring the fuel-efficiency of existing
5. From 1st
March 2001, the reduced rate will be extended to apply to all existing
cars with engines up to 1,200cc - giving a £55 cut to
an additional 2.2 million smaller cars, including around 700,000 models
of the Ford Fiesta, 200,000 Vauxhall Corsas, 200,000 Vauxhall Novas
and 200,000 Renault Clios.
6. VED rates for
existing cars, taxis and vans will increase in line with inflation
from 1st March 2001: the reduced rate for cars with smaller
engines will be £105; the standard rate will be £160.
7. Also from March
2001, a graduated VED system for new cars will be
introduced. Under this system, all new cars first registered from
that date will go into one of four VED bands according to their rate
of carbon dioxide emissions.
8. Within each
band, there will be a £10 discount for cars using cleaner fuels
and technology. Initially, this will include cars run on road fuel
gas, bi-fuel and dual fuel cars, and cars using hybrid technology.
9. Within each
band, there will also be a supplement for diesel cars to reflect their
higher emissions of particulates and other pollutants which damage
local air quality. The system will be built in a flexible way so that
the treatment of diesel cars can be reviewed as their emissions standards
10. The table
below sets out the bands and rates for the new system, including some
examples of where the most fuel-efficient models of popular new cars
11. New light
goods vehicles (e.g. vans) for which there is currently no carbon
dioxide emissions data available will pay £160 VED.
12. Under this
new system, 95% of new cars will pay from £5 up to £70 less
than under the rates for existing cars. Petrol models of Britain's
best-selling new cars - the Ford Focus and Fiesta - will pay up to
£40 less; while petrol models of the Vauxhall Astra, Rover 400
and Ford Mondeo will pay up to £20 less.
13. The new graduated
VED system will therefore encourage the use of new cars as opposed
to older cars, cars with lower CO2 emissions and better fuel-efficiency,
and cars using cleaner fuels and technology.
and publicity for changes to car VED
14. In response
to requests from motor manufacturers and traders for additional time
to prepare, the Government has extended the timetable for introduction
of the graduated VED system for new cars from Autumn 2000 to March
2001. This will coincide with the introduction of Y-registration number
plates so it will be easy to distinguish cars which will pay VED under
the new system.
15. The DVLA will
continue to work with manufacturers, traders and other bodies throughout
the year to collect the information and introduce the systems on which
the new scheme will be based. Further details about the new system
can be found on www.dvla.gov.uk/newved
16. To ensure
public awareness and understanding of the new system, DVLA will be
launching an extensive publicity campaign to explain the changes and
promote the financial and environmental benefits of choosing cleaner
cars: not only from cutting down on VED and fuel bills, but also from
cutting down on emissions of carbon dioxide and local air pollutants.
17. For the extension
of the reduced rate threshold to 1,200cc, DVLA will be putting into
place a special, customer-friendly rebate scheme. From March 2001,
all owners of newly-qualifying vehicles who have licensed their car
at the standard £155 rate during 2000-01 will receive a £55
cheque in the post as a reward for driving a smaller, cleaner car.
of 44-tonne lorries
18. Acting on
the unanimous recommendations of the Commission for Integrated Transport
(CfIT), the Government has decided to allow 6-axle lorries meeting
Euro II emissions standards to use UK roads at new 44-tonne weight
limits. A target date of 1st January 2001 has been set
for their introduction: the final date will be confirmed in July's
ten year plan in the context of wider freight policy.
19. 44-tonne lorries
are no bigger than existing lorries, but are simply allowed to carry
heavier loads. They do less damage to roads than existing 40-tonne/5-axle
lorries because of their better weight distribution. CfIT's report
on 44-tonne lorries (published on 6th March) can be found
at www.cfit.gov.uk. It also recommends improvements in the current
enforcement regime and to rail freight.
20. Talking of
his decision to introduce 44-tonne lorries, Lord Macdonald said:
"CfIT has carried
out the most thorough analysis of the 44-tonne issue in 20 years.
They have considered the issue in terms of the best environmental
outcome, and concluded that there would be a small but significant
net gain to the environment from allowing 44-tonne lorries. This approach
of looking for the best environmental options is at the heart of our
integrated transport policy.
"I accept CfIT's
conclusion that 44-tonne lorries will mean fewer lorry journeys are
needed to carry the same amount of goods, which they say is equivalent
to removing 230 return journeys from London to Edinburgh every day.
It is in no-one's interest to have empty space in lorries running
around our roads when that space can be filled without penalties in
terms of pollution or safety."
21. A VED rate of £2,950 has been set for the new 44-tonne/6-axle lorries, which will take effect from a target date of 1st January 2001. The other changes to lorry VED, which take effect from 6pm on Budget day, are set out in detail below. They will cost a total of £45 million per annum, with major VED cuts targeted at areas of the haulage industry which are under the most competitive pressure:
against 'cowboy hauliers'
22. To protect the competitiveness of legitimate UK hauliers, the Government is taking forward a number of measures designed to impose more stringent checks and penalties on those who operate illegally and to lessen the compliance burden on legitimate hauliers. These include:
23. Details of
the company car tax reforms are set out in press notice REV
6 or can be seen at www.inlandrevenue.gov.uk/cars
ENQUIRIES should be directed to the
DETR Press Office on: 020 7890 3066