Budget 1999: Motoring - Buy smaller car, drivers are warned

MOTORISTS were given a clear warning to get out of their vehicles and use public transport, or buy a smaller car, as the Government imposed hefty rises.

The price of a gallon of unleaded petrol will top pounds 3 for the first time after the Chancellor announced a 6 per cent rise in fuel duty.

He also unveiled a package of measures to reward the use of "greener" cars, initiatives to encourage workers to share vehicles or to come to work by bicycle, and a crackdown on company car tax-breaks for 1.5 million drivers.

Motoring organisations warned the measures would hit rural drivers and the elderly and accused ministers of raising a green "smokescreen". But environmental groups gave the Budget a cautious welcome.

From 6pm yesterday, duty on unleaded fuel rose by 3.79p a litre. This means a rise in a litre of fuel of 3.79p to around 67p and to pounds 3.13 from pounds 2.91 for a gallon. Leaded fuel duty rose by 4.25p per litre to 74.4p. Diesel rose by 6.14p per litre to nearly 71p.

The 6 per cent rise implements the Government's commitment to "escalate" fuel duty as part of its climate change strategy.

The Chancellor announced a reform of the Vehicle Excise Duty (road tax) on cars based on the level of pollution emissions. VED for all private and light goods vehicles will be increased by pounds 5 to pounds 155 from today. But from 1 June smaller cars with engines up to 1,100cc would pay a rate of pounds 100. From autumn 2000, the rate for new cars will be determined primarily by their carbon dioxide emission rate.

The RAC said that an average motorist driving 10,000 miles a year using unleaded fuel in a hatchback car would be pounds 60 worse off. Edmund King, head of campaigns, said: "Many motorists, such as the elderly, disabled and rural residents are totally dependent on the car."

He said the two-tier VED system was a "tax on luxury not use" as it did not punish drivers of larger cars for heavy mileage. "The Treasury is dressing up tax rises in greenery."

The AA said the rises in fuel duty meant motorists were paying a record pounds 8.50 to the Chancellor for every pounds 10 spent on the garage forecourt. John Dawson, head of policy, said: "The Chancellor's environmental excuses for hitting drivers again with the fuel escalator are wearing extremely thin."

Mr Brown announced a reform of tax on company cars to encourage the use of fuel efficient cars. The current system that cuts the tax by a third for people who do more than 2,500 business miles and by half for more than 18,000 will be abolished in 2002. It will be replaced with incentives to encourage the purchase of cars with lower CO2 emission. Mr Brown said the reform would cost the typical user about pounds 1 a week.

The Chancellor was applauded by environmental groups for removing tax penalties on employers who offer green benefits such as works buses, discount fares and allowances for using cycles.

Tony Bosworth, of Friends of the Earth, said: "This Budget represents the Government's first halting steps towards green economies."

Transport 2000 director Stephen Joseph said: "We're now seeing the tax system starting to swing behind integrated transport and away from rewarding gas guzzlers and business car travel."

The Chancellor said there would be more money for public transport. However, the Government said the details would not be published until John Prescott, the Deputy Prime Minister, returned from India.

The changes are unlikely to meet Mr Prescott's target of cutting the number of car journeys. One think-tank, the Centre for Economics and Business Research, said road usage would be cut by just 0.51 per cent.

Mr Brown offered some good news for the freight industry. VED will be frozen for 98 per cent of all lorries and cut by up to pounds 1,000 for lorries and buses with clean engines.

The Freight Transport Association welcomed the move but condemned the 6.14p rise in duty on diesel, which it said effectively doubled the world price of bulk diesel. "The Chancellor's crude strategy of bleeding the transport industry to pay for Government expenditure should be about helping industry - not stealing from it," it said.

Drivers will also have to pay extra for motor insurance as Insurance Premium Tax rises by 1 per cent to 5 per cent from 1 July, adding pounds 6 to an average household insurance bill of pounds 667.

The Opposition seized on the rises in fuel duty. William Hague, the Tory leader, said: "The Government have taken their persecution of the motorist too far and their damage to the haulage industry too far."

News
Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
News
A scene from the video shows students mock rioting
newsEnd-of-year leaver's YouTube film features staging of a playground gun massacre
Travel
travel
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
PROMOTED VIDEO
Voices
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
News
i100This Instagram photo does not prove Russian army is in Ukraine
Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
News
Morrissey pictured in 2013
people
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
art
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Environment
Tyred out: should fair weather cyclists have a separate slow lane?
environmentFormer Labour minister demands 'pootling lanes' for women cyclists
News
people
Sport
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
News
Field of broken dreams: Andy Bell visits Passchendaele
news5 News's Andy Bell visited the killing fields of the Great War, and his ancestor - known only from his compelling war diary - came to life
Travel
travel
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In my grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel