Motoring: Budget makes small beautiful

LAST WEEK'S Budget was bad news for anyone with a car. Drivers will have to pay 3.79 pence more for a litre of unleaded petrol, an increase of more than 9 per cent. Four-star, which will be banned by the end of this year, was up by 4.25 pence per litre, while those with diesel cars were hit with a whopping 6.14 pence rise. Not only that, road tax rises by a fiver to pounds 155.

However, there is a silver lining. Drivers of "small" cars will save pounds 55 from June. This is not exactly cause for riotous celebration: as the Society of Motor Manufacturers and Traders (SMMT) points out, vehicle excise duty (VED) is going up for 24 million drivers, and falling for just 8 per cent of car owners.

"The Chancellor has missed a golden opportunity to send a green message to British motorists by giving confused signals with these extra taxes," says Roger King, acting chief executive of the SMMT. "Extra road taxes for 91 per cent of drivers creates more revenue, but has doubtful environmental benefit. Fuel costs have risen yet again and it is now time to review this crude tax."

A review is on the cards: from autumn 2000 the Treasury will levy a variable duty on new cars, based on their carbon dioxide emissions.

That means higher taxes for bigger engines, probably those above 2 litres. For the moment, as far as excise duty is concerned, Mr Brown has chosen to make the distinction between cars a question of engine size.

The Budget small print reveals that small actually means cars up to 1.1 litres. A quick glance at price lists presently reveals that there are precious few "small" cars actually on sale at the moment.

In the main it is good news for Far Eastern manufacturers, who already have to meet strict local regulations. Daihatsu has the largest number of models that comply with the 1.1 criteria, from the city-car sized Cuore to the supermini Sirion, and on to the micro-people-carriers Move and Grand Move.

Suzuki is next up, with the tiny Alto supermini Swift and people-moving Wagon R. Korean maker Hyundai has its own perpendicular people-mover, the Atoz. Perodua's Malaysian remake of a Daihatsu, the Nippa, is the cheapest car on sale.

Nissan's 1.0 litre Micra is built in the UK. European offerings are the Citroen Saxo, Fiat Seicento and Vauxhall Corsa. The Volkswagen group offers a Polo and the Lupo, although there is also a Spanish-built version of the latter - the Seat Arosa.

For the moment, that is it in UK showrooms as far as "small" cars are concerned. As competent and comfortable as some of them undoubtedly are, a pounds 50 annual saving isn't exactly going to tempt many drivers of the kind likely to spend that much on a tank full of unleaded out of larger cars and into small ones. There is, however, a more powerful moral argument for switching to a smaller car and that is the correspondingly smaller amounts of pollution.

Carbon dioxide (CO2) is the most significant greenhouse gas and a car produces roughly three times its own weight in CO2. Every gallon of petrol produces 11kg; diesel, 12kg.

A useful book, New Car Fuel Consumption Figures, produced by the Department of Environment, Transport and the Regions, lists the CO2 g/km rating of cars alongside their miles-per-gallon fuel consumption.

The lower the CO2 figure the better. So a Hyundai Atoz at 151 CO2 g/km is good, but a Ford Ka at 145 CO2 g/km is better. Hold on though: the Ka has a 1,300cc engine and the Atoz just 999cc.

The Renault Clio, a small car by most people's reckoning, and with a CO2 factor of just 146, has a 1,200cc engine. However a Suzuki Alto 1.0 GL automatic, which is small for tax purposes, rates 171 in CO2 g/km terms.

Apply the small-car definition to used cars and suddenly the situation looks increasingly bizarre. A 15-year-old Ford Fiesta 950, or a 998cc Mini Metro is going to pump out much more pollution than just about any modern catalytic converter-equipped model up to 2.0 litres.

Although the majority of road-users who need larger and more practical vehicles won't be tempted by the lower VED, expect prices of certain small used cars to rise. Drivers who want a car for local journeys to the shops or station, might well be tempted to consider an old 1000cc Mini.

If you already own a sub 1.1 car and feel miffed about the tax disc, don't worry, you can get an excise-duty refund form from the post office.

The real budget winners, though, are liquid petroleum gas (LPG) users. The excise duty on low pollution was slashed by 29 per cent. Unfortunately, the choice of bi-fuel models is even more restricted than low duty 1.1s. Currently certain Vauxhall Astras, Vectras, Omegas will run on it. However, all these vehicles will be subject to the new higher rate of duty at pounds 155.

James Ruppert