Company cars fuel tax threat

A tax on free fuel for company cars to persuade more commuters to use public transport has been proposed in a draft Labour transport document, it emerged last night.

The tax plans are part of a Labour Party strategy aimed at reducing car use in towns by 30 per cent over the next ten years to ease congestion, improve the environment and cut pollution.

Labour is considering plans to tax the value of free fuel and impose a special business charge on car parking spaces in commercial premises in towns. The revenue could go towards public transport spending.

Some Labour sources believe there is growing public acceptance of the need to curb the use of cars in towns and cities. Research has shown that 80 per cent of cars coming into London are company cars or have free parking at work.

The scheme would be coupled with tax concessions for firms introducing schemes to encourage their workers to use public transport or cycles. Labour is considering setting a target of stabilising traffic levels by 2010 and reducing them to 1990 levels by 2020.

More motorways would have Continental-style picnic areas and truck stops where drivers could rest to cut accidents.