Paul Everitt, SMMT chief executive, is this afternoon (2 July 2008) giving evidence to the Environmental Audit Committee (EAC) during its inquiry into changes made to vehicle excise duty (VED) rates in Budget 2008. The EAC launched the inquiry to assess the role that VED can play in reducing carbon emissions from road transport. The committee also wanted to assess the acceptability of using VED in this way in the wider context of public attitudes towards green taxes.
The automotive industry supports an effective and stable framework for CO2 based taxes that encourage sustainable market transformation to lower emitting models across all vehicle types. The changes announced in Budget 2008 do not give clear signals as to their environmental effectiveness but substantially raise the costs for motorists.
SMMT does not believe the introduction of the first year rate of VED will have a positive impact on environmental performance or consumer behaviour. VED is a charge on ownership not on use, which undermines the principle of the tax. Average CO2 from new cars has fallen by 13% over the past decade in the
“SMMT recognises that VED is an important signal but it is not the main driver for change,” said Paul Everitt, SMMT chief executive. “We fear motorists will see the first year rate as a way of raising cash rather than reducing carbon.”
SMMT believes there should be a full and proper analysis of VED to measure its contribution in reducing emissions. It is important that government has a fair and proportionate view of VED and is transparent in its aims and approach. VED should not be used as another revenue raising exercise for government, and SMMT recommends a full consultation be carried out prior to decisions being made that will affect both the motorist and the industry.
