COMMENT'
7th March 1996, Page 7
Page 7, 7th March 1996 — COMMENT'
Keywords : Motoring Taxation In The United Kingdom, Truck, Vehicle Excise Duty, Tax, Euro
Let's be honest. At first glance, John Gummer seems an unlikely choice to play Fairy Godmother. But if his off-the-cuff remarks about offering lower Vehicle Excise Duty rates for Euro-2 engined trucks are anything to go by, then the Environment Secretary could well find himself up there with the very best of those glitter-covered wand wavers. Before the nation's hauliers lift a rousing hurrah, there's many a mile between "considering" and "implementing". However, if the recommendations of the Sustainable Development Round Table, co-chaired by Gummer are adopted, then more operators are likely to be encouraged to buy more expensive—but cleaner—Euro-2 vehicles. That's a very big IF. While the Department of Environment might like the idea, it's the Treasury that has to be persuaded to loosen the purse strings. When it comes to VED concessions, it's worse than Baron Hardup. The net underspend of revenue raised through VED and fuel tax is already in the region of £10bn a year. And if the Department of Transport can't unlock that cash for something as critical as new road-building, it certainly doesn't bode well for tax concessions on green trucks. While there may well be a "...Government commitment to review VED to ensure that it better reflects the effect on the environment of vehicle emissions...", there's also a Conservative Party commitment to cut as much off personal income tax as possible before the next general election. We wonder why? Meanwhile, someone is going to have to help bankroll that objective—so step forward all road users! It's interesting to see the DOE approaching the problem of persuading more hauliers to buy greener trucks by coming at it from the back door. After all, the Government, like the truck manufacturers themselves, has had ample notice of the legislation. Yet it has steadfastly refuses to offer any upfront subsidy or grant to offset the increased price of a new Euro-2 truck—currently running at around 22,000 more per vehicle. A continuous VED concession, however, could well prove to be a better option in the long run— not least by rewarding those operators who've already bought a Euro-2 wagon. Just so long as the Treasury doesn't give with one hand and then take away with the other by increasing VED rates at successive Budgets. That would whiff of... what's the word? Hypocrisy? It would also be the worst kind of magic wand waving in the pantomime that's otherwise known as Government support for road transport.
Organisations: Department of Environment, Conservative Party, Department of Transport
People: John Gummer