Reuters News Service
March 21, 2000
LONDON, March 21 (Reuters) - Tax favours for truckers and the owners of smaller cars, alongside extra money for transport infrastructure, were unveiled in Britain's annual budget on Tuesday.
The moves, coupled with a real-term freeze on fuel tax in light of high crude oil prices, were billed as setting Britain on a road to better transport and a better environment.
Motor industry officials and exporters applauded the 55 pounds ($86) a year cut in Vehicle Excise Duty (VED) rates for 2.2 million small cars, along with lower rates for "cleaner" new cars and for bigger 44-tonne six axle trucks set to hit British roads.
FOUR WHEEL THREAT TO GREEN AND PLEASANT LAND
But environmentalists and train operators condemned the measures, announced in Parliament by Chancellor of the Exchequer Gordon Brown.
"The government has given in to the roads lobby," said the green pressure group Transport 2000.
"Cutting taxes on the biggest lorries will lead to more juggernauts cutting through Britain's towns and villages and less freight going by rail...the government is in danger of building Los Angeles in England's green and pleasant land."
"The Deputy Prime Minister set a growth target for passenger use of rail and this budget does nothing to underpin that commitment," said a spokeswoman for the Association of Train Operating Companies.
"Instead it is a motorists' budget, reducing the real cost of travelling by car."
The Society of Motor Manufacturers and Traders said Brown had "put the brake on the high level of taxation faced by Britain's motorists," and "thrown a much needed lifeline" to truckers who face stiff competition from foreign hauliers.
"Both excise duty on trucks and fuel surcharges are much lower in Europe," said Ian Campbell, Director General of the Institute of Export.
"This makes our goods more expensive to truck to Europe from the UK and means more and more UK importers and experters will be using continental hauliers. If there is going to be an EU-wide level playing field, then it ought to extend through the transport costs."
The government said an extra 280 million pounds would go into tackling congestion hot spots and modernising public transport throughout Britain.
Every region will benefit, and Deputy Prime Minister John Prescott will announce specific projects shortly, it said.
NEW CARS GRADED BY CO2 EMISSIONS RATE
The 55 pound VED cut from the standard annual "tax disc" charge of 155 pounds will apply to cars with engines up to 1200 cc from March 2001.
In addition, a new four-band CO2 emissions grading system will mean that 95 percent of new cars will pay between five and 75 pounds less than the standard rate from the same date.
Tax charges on company cars will also be graded according to their CO2 emission.
Road fuel duties will go up by two pence a litre -- an inflation only increase -- with immediate effect, and in October 2001 a one penny per litre incentive for ultra low sulphur petrol will be introduced.
Trucker competitiveness is addressed through VED cuts worth 45 million pounds, introducing new "road friendly" larger lorries at a low VED rate.
The rate for 40-tonne five-axle trucks used by the UK's international hauliers falls by 1,800 pounds. For other trucks it either falls by 500 pounds or is frozen for the third year running.
There will also be tougher enforcement against "cowboy hauliers" including legislation to impound their trucks.
((London newsroom, tel +44 171 542 3215, fax +44 171 583 3769, email, andrew.callus+reuters.com))
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