Chancellor still digesting Stern and Eddington

06 December 2006 #SMMT News

Chancellor Gordon Brown avoided the temptation to tinker with vehicle excise duty in his pre-budget statement, a move welcomed today by the motor industry.

SMMT believes that stability and clarity should be the watchwords in all motoring taxes and hopes Gordon Brown is reflecting carefully on Stern and Eddington and the adoption of an integrated approach to all transport taxes. The approach must recognise the significant CO2-based taxes already levied on motorists and commercial vehicle operators through fuel duty, VED and company car tax.

However, the industry is disappointed that the Chancellor, once again, missed opportunities to widen incentives for the take up of cleaner vehicles.

Messages on bio-fuels were confused. The Chancellor should lower duty on E85 bio-ethanol. Cars which can use E85 are on the market yet the fuel is no cheaper at the pump, so there is no incentive to buy these flex-fuel vehicles. Brown also failed to offer any incentives to encourage truck operators to specify the latest Euro 5 and Euro 6 engine standards.

‘It’s another lost opportunity for greener vehicle incentives’, commented Christopher Macgowan SMMT chief executive. ‘However, it’s encouraging that the Chancellor seems to be carefully considering fiscal policy in road transport. We look forward to helping ensure that motoring taxes are fair, stable and, above all, absolutely transparent.’

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