Drivers to pay more for fuel bills and road tax Randyh

Budget and You: MOTORING
Click to follow
Britain's 29 million motorists were hit hard while no new cash was made available for public transport.

Ministers had previously said that the Government would encourage motorists to leave their cars at home and use buses and trains.

Instead the Chancellor resorted to the previous administration's tactics of trying to price drivers out of their vehicles by increasing petrol prices and excise duty.

Petrol went up by 4p a litre in yesterday's budget. This coupled with the 19p per gallon increase introduced by Kenneth Clarke, the former Chancellor, in November last year will mean that pump prices will have risen more than 35p a gallon in just eight months.

Motoring organisations said that the price increase was "disappointing" - adding that drivers already pay pounds 25bn in taxes. Edmund King, a spokesman for the RAC, said: "Where is the extra pounds 2bn the motorist will be forking out going? What we do not want to see is any more taxation without better transportation."

The RAC calculates that drivers of small hatchbacks who covered 7,000 miles a year would pay an extra pounds 33. Drivers of larger family saloons who did 24,000 miles annually would have to shell out an extra pounds 130.

The cost of a tax disc will go up in November, in line with inflation, from pounds 145 a year to pounds 150.

The increases are unlikely to affect the amount of car journeys. One think-tank, the Centre of Economic and Business Research, said that the measures would "only lower the amount of road usage by 1.1 per cent by the year 2000".

Although the Chancellor did raise the rate at which petrol prices will rise - to 6 per cent above inflation every year - it will hardly dent driver behaviour. A recent AA report found 82 per cent of motorists would still use their cars even if petrol prices doubled over 10 years

As a gesture to environmentalists, Mr Brown said that he hoped to extend a scheme proposed by the last government which would offer cash back on excise duty for "clean" buses and lorries.

The last Government announced an intention to cut vehicle excise duty by up to pounds 500 a year for lorries meeting a low emissions standard.

This proposal will now also apply to buses, which have been targeted by the Treasury as the source for 18 per cent of particulates - linked to thousands of deaths.

Mr Brown also launched a review of fuel rebates for buses. At present, operators on certain routes receive a rebate of around two-thirds of the fuel duty they pay for diesel and petrol. The rebate is claimed by around 50,000 of the buses on UK roads and costs the Treasury pounds 200m a year.

The Chancellor's review will examine penalising buses that belch noxious fumes and increasing rebates for cleaner coaches.

The bus industry remained unimpressed with the proposals, pointing out that the green rebates would not cover the fuel price hikes.

"It is a derisory offer. It will cost an extra pounds 1,500 to run a bus per year and that would be lowered to pounds 1,000 if you happened to have a clean, low-sulphur diesel engine," said a spokesman for the Confederation of Passenger Transport, which represents bus operators in Britain.

Green campaigners said the Budget was "a missed opportunity". "There are very few measures here that will get people to leave their cars at home. And nothing about the much-heralded integrated transport policy," said Simon Festing, transport spokesman for Friends of the Earth.

Transport ministers had raised expectations after being elected - promising a radical review of transport funding.

Plans that were considered included taxing company cars, business car- parking spaces, introducing road tolls, and even a scheme which would offer motorists cash to trade in their old bangers for newer, cleaner models.

No proposals materialised, however, and transport users will have to wait until next spring to see whether the Government will make a difference to commuters' lives.

Looking for credit card or current account deals? Search here