Select Committee on Environmental Audit Appendices to the Minutes of Evidence

The Pre-Budget Report


  WWF believes that to address transport emissions, the aim must be to reduce the amount of traffic on the roads and to encourage the use of more efficient engines and alternative fuels. High fuel prices have a role to play in achieving this change. Whilst we understand that in the current climate of high fuel prices a freeze on the level of fuel duty may not lead to a decrease in the price of fuel on the forecourt, WWF believes that the Government should ensure that fuel prices remain high in the future to send a signal to consumers that they must reduce their fuel use.

  At the same time, WWF believes that high fuel prices alone will not solve the problem and they must be coupled with increased availability of and incentives for alternatives—better and cheaper public transport, alternative fuels, and fuel efficient cars for example, and WWF supports the use of fuel duty revenues to accelerate the development of these alternatives.


  WWF is concerned that the drop in the duty on this fuel coupled with the intention to make it the predominant fuel on the market has effectively given an across-the-board reduction in fuel tax. WWF believes that the Government has sent a very confusing message to motorists about the environmental benefits of fuels and the link to climate change. There is already confusion as to the benefits of existing fuels on the market and the presentation of the tax cut for ultra low sulphur fuels as an environmental measure has added to this confusion.

  WWF accepts that the rapid introduction of ultra low sulphur fuels will improve local air quality but believes that it will have little effect on CO2 emissions. If the cut in fuel duty results in an increase in the use of fuel, emissions of CO2 may well increase. We are also aware of research casting further doubts on the environmental benefits of ultra low sulphur fuels (in particular the recent report by the University of Ulster as reported in many Newspapers). We would urge the EAC during the course of its inquiry to investigate this issue further.


  WWF welcomes the announcement in the PBR that the government will give duty reductions to practical alternative fuels. However, WWF believes that in addition to the duty cut, money is needed to allow these fuels to be developed, and bring them to the market. WWF would like to have seen money from the fuel duty invested in this fund to allow for the development of the alternative fuels.


  Whilst welcoming the reduction in VED for cars up to 1500cc WWF believes that the £55 reduction will do little to encourage the purchase of smaller, more efficient cars, particularly in light of the fuel tax cut. To further encourage the purchase of smaller cars, WWF would like to have seen a corresponding increase in the VED for larger cars, in particular very inefficient models such as certain large engine multi-purpose vehicles. These are taxed at a much higher rate elsewhere in Europe, for example Germany.


  WWF believes that the changes proposed to company car taxation to encourage the use of smaller more efficient, alternatively fuelled cars are a step in the right direction towards encouraging the use of less damaging forms of transport. The provisions to encourage green travel plans are also welcomed and WWF would like to see more encouragement given to these in the future. Tax free travel vouchers are also an instrument worth considering.


  WWF understands that the Government had to respond to the concerns of the haulage industry but we are unsure of the environmental effectiveness of the measures proposed. We are particularly concerned about the effect the across-the-board cut in fuel tax rates will have. The Government announced a number of measures to help hauliers (revised VED based on environmental criteria, £100 million scrappage fund, introduction of a user-charge scheme) but until the details are available it is difficult to identify their environmental benefits.

  Overall, WWF believes that these measures do not do enough to encourage the use of alternative forms of freight transport to reduce the reliance on road transport and fuel.

December 2000

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