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Budget 2008: beginning of “cohesive environmental strategy”

Alistair Darling’s first Budget – and the accompanying King Review into the carbon impact on the environment of road transport – marks the beginning of a “cohesive environmental strategy”, according to Gary Killeen from GE’s car leasing division.

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10 January 2012

Alistair Darling’s first Budget – and the accompanying King Review into the carbon impact on the environment of road transport – marks the beginning of a “cohesive environmental strategy”, according to Gary Killeen from GE’s car leasing division.Taking the Budget and the King Review together – which reviewed road transport’s environmental carbon impact – it looks as though we have the beginnings of a cohesive environmental strategy for cars. A strategy that covers both business and private vehicles.

The Chancellor and Professor King have outlined a series of measures running from the beginning of a car’s life through its business fleet life cycle and beyond that appear to be both practical and worthwhile.

Much of the thinking outlined appears to be about encouraging drivers to opt for a greener model when they make their new car choice.

It seems that in the short-medium term, a figure around 130g/km of CO2 is the Government’s new target for business cars – as seen in the new 2009-10 first year vehicle excise duty rates and the 2010-11 company car benefit in kind taxation rates outlined in the Budget. We believe that this is a fairly practical figure that many business fleets can work towards.

Better information about which vehicles are greener is likely to be seen both in the showroom and in car advertising, which is to be applauded.

An interesting point is that Professor King would like to see environmental labelling applied to used cars as well as new ones and, if adopted, this could potentially have an impact on residual values.

The 2008 VED increases will also have an ongoing small but noticeable effect in encouraging the adoption of greener vehicles in the short term, as will the revised emissions-based capital allowances system for company cars.

However, it would perhaps have indicated a more joined-up approach if the 120g/km and 160g/km thresholds chosen for the latter matched the 130g/km figure that appears to be the target in other areas of taxation.

Finally, we are surprised that there has been no change to AMAP rates. We would welcome a longer term statement from the HMRC to cover this area going forward.

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Ralph Morton

Ralph Morton

Ralph Morton is an award-winning journalist and the founder of Business Car Manager (now renamed Business Motoring). Ralph writes extensively about the car and van leasing industry as well as wider fleet and company car issues. A former editor of What Car?, Ralph is a vastly experienced writer and editor and has been writing about the automotive sector for over 35 years.

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