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Petrol taxes to rise again
Paul Waugh, Deputy Political Editor10 Mar 2008
Motorists are to feel the squeeze in a "Green Budget" on Wednesday.
The Chancellor is to press ahead with a 2p a litre rise in fuel duty. He also plans punitive taxes on gas guzzling cars and incentives to buy low-emission vehicles.
Alistair Darling will put the battle against climate change at the heart of his economic policy.
The rise in prices at the pump, known as the fuel duty escalator, will take the average cost of a litre of unleaded petrol to 107.8p - far above the 70p level which caused the widespread fuel protests of 2000.
Diesel is already an average of 111.9p and neither is likely to fall in the short-term while oil prices remain high, partly due to the plunging value of the dollar.
The fuel duty increase will add to the soaring cost of living by pushing up consumer goods prices.
In a further move to show his green credentials, Mr Darling will announce that Britain's first five-year "carbon budget" - setting out the target of reducing emissions by 60 per cent by 2050 - will be published next year.
There were claims this weekend that he had had a last-minute "wobble" over the rise in fuel duty, but Treasury sources have told the Standard he is determined to push ahead with the 2p-a-litre increase next month.
Motoring organisations have been calling on him to defer it but to do so would leave him short of revenue for income tax cuts due to come into force next month. It would also go against the grain of his pro-green message, aides said. Mr Darling is set to announce a shake-up of car taxation, with people buying the most polluting vehicles heavily penalised and those who go for more environmentally friendly alternatives paying less tax.
Buyers of new "gas-guzzlers" in car tax band G - including Range Rovers and other 4x4s - will be hit with a first-year charge of more than £1,000 in vehicle excise tax, before it reverts to the current level of £400.
Mr Darling will also increase the number of bands from the current seven. Drivers in the lower bands will pay less tax than at present and companies that use greener fleet vehicles fleets will get further tax incentives. Implementation of many of the tax increases, including those on cars, will be delayed for a year. The £1,000 "showroom tax" on new gas guzzlers is recommended in a report on "decarbonising road transport" prepared for the Treasury by Professor Julia King.
Mr Darling will also announce a consultation with the industry on ways in which the carbon emissions of particular vehicles can be made clearer to car buyers. Professor King's suggestions include different coloured tax discs on cars which could allow parking charges, for example, to be set higher for the more polluting vehicles. Mr Darling is expected to announce a switch to a new, tougher policy to encourage greater use of biofuels in cars.
But the overall green tinge to the Budget looks set to be undermined today when Business Secretary John Hutton signals support for a new generation of coal-fired power stations.
His remarks will trigger speculation that he will give the go-ahead to the first coal-fired station since 1984.
Reader views (10)
It's amazing what has been said in this forum. We think voting Labour in was a mistake. The truth there is no telling what any other party will do. There is an old saying that: "The devil you know is better that than the devil you don't". If you ask me the way forward is for us to exercise our constitutional rights like Chris Pocock said. But instead of getting rid of the present government, we vote against their proposals. After all we are the people they serve and not the other way round.
Like D from London also mentioned "Yet another small lobby group, the green movement, getting more of a say than the majority". Our voice as the majority should be louder and heard more than the smaller group but is that happening? No sir!
So the way forward is not to get rid of the present government because there is no telling what magic the next will do, - but to express our God given rights against their proposal. Why? because they serve us.
- Sola, Basildon, Essex., 12/03/2008 08:39
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This is probably the luckiest of any elected "democratic" government in history.
With the winning combination of "climate change" "green issues" "terrorism" "binge drinking" "obesity" "passive smoking" covering almost all bases, it has created for itself an opportunity to rip us off left right and centre, all for our own good.
Its profiteering, hypocrisy and easy lies do not make this country a comfortable place to be any more.
- Gary, London, UK, 11/03/2008 14:15
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Sorry I voted Labour. I will not make the same mistake again.
- Mike, Woking Surrey, 11/03/2008 00:49
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Is it me!...Everyone in the UK just continues to take these price hikes and do we hear anyone really complaining? What happened to people power? As voters it is time we exercised our constitutional rights and get rid of this government. Don't wait for the hauliers to do it - collectively we can bring down this government down once and for all. This Labour Government has now go gone too far...enough is enough.
- Chris Pocock, London, 10/03/2008 23:17
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I don't know anyone, not even passionate recyclers and eco-minded people, who has any of this neurotic interest in carbon emissions. It's scientifically dubious, to say the last.
I do know plenty of people who are cynical about it being an excuse for ever more tax rises.
Combine the folly of biofuels (pushing food prices up) with rising transport costs and you have a good excuse for the public to give Labour a kick in the ballots.
- Brian, London, 10/03/2008 17:09
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Every week I fill my car up with diesel the price goes up - this greedy government have to go - when he puts the price up of diesel he puts the price up of food - clothes - medicine - ambulances - everything this has got to stop and I think the haulage association will bring him down and I hope they do.
- Eddie Oriordan, Wisbech, 10/03/2008 15:24
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Fuel costs have increased to such an extent over the past year that the only reason for a 2p/litre fuel duty accelerator is to fleece drivers yet again. New Labour won't be happy until they have appropriated 99% of our income for their pet projects. I can't wait for the election!
- The Gene Genie, Croydon, 10/03/2008 14:37
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Climate change and the unproven and shaky theories that it is man that is causing it, have really given all world governments a really good excuse to clobber, hammer and nail the taxpayer with ridiculous taxes disguised a "green". Yet another small lobby group, the green movement, getting more of a say than the majority. One day democracy will actually mean what it says on the tin and the majority will hold the whip hand.
- D, London, UK, 10/03/2008 14:11
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Enough is enough but nobody cares anymore in england all that happens is to complain today forget it tomorrow.
- Michaelfulwood, Nottingham England, 10/03/2008 13:21
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I guess it is a right thing to do for the bigger engined vehicles such as 4x4 but having fuel prices kept high will not stop people driving, well it has not stopped me yet.
- Ozgur Akinci, London, 10/03/2008 12:59
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