The RAC Foundation described today’s reforms to VED as a "green light for cleaner motoring" and welcomed the Chancellor’s decision to keep fuel duty increase on ice for a further 6 months.
The Chancellor’s decision to introduce a new top band for VED, offset against reductions in the cost of VED for cleaner vehicles, will help motorists to make a greener choice of car.
The RAC Foundation will carefully examine the details of the scheme to make sure that the overall burden of VED will not increase, in line with our proposals which were made in a pre-Budget letter to the Chancellor.
The RAC Foundation also welcomed the Chancellor’s announcement that inflation-linked fuel duty increases would be kept on ice until September. The cost of fuel has risen by 12% in 12 months – six times the rate of inflation – and any additional increase would disproportionately hit those on low incomes. Low income motorists already spend 24 per cent of their household outgoings on motoring, and fuel makes up around half of those costs.
Edmund King, executive director of the RAC Foundation, said: "Brown’s radical tax disc reforms give a green light to cleaner motoring. Reduced tax for cleaner vehicles is a great incentive to help motorists choose the most environmentally friendly model suitable for their needs."
Other announcements today:-
Alternative fuels and incentives:
The RAC Foundation welcomed the continued duty incentive for greener fuels.
The RAC Foundation Budget fact file:
- Motorists pay £43.5bn to the Treasury in motoring taxes. Only £6.58bn of this is re-invested in the road network.
- 93% of passengers and 89% of UK freight traffic travels by road.
- A vehicle moving at 50mph emits just ½ of the carbon dioxide of a vehicle traveling in congestion at 5mph.
- The CBI estimates that congestion costs British industry £20bn each year.
- The average new car emits 10% less CO2 than its 1997 equivalent. The average 4×4 emits 15% less CO2 than its 1997 equivalent.