£3,330 levy on new cars proposed

An influential think-tank, supported by the Government, is urging £150 billion of new green taxes on businesses and households – including a £3,300 levy on new cars.

The recommendations from the Green Fiscal Commission (GFC), to be presented by Lord Turner, head of the committee on climate change – and chairman of the Financial Services Authority – could bring a drastic reshaping of the tax system to curb greenhouse gas emissions and encourage investment in low-carbon technology. Among the proposals are a tripling of fuel duty over the next decade, a household energy tax, and the hefty tax added to the price of every new car.

Greg Barker, the Tory environment spokesman, Alan Whitehead, a Labour MP on the energy select committee, and Chris Huhne, the Liberal Democrat home affairs spokesman, will speak at the launch of the 100-page report from the commission – a body of academics, industrialists and politicians set up to advise government.

The GFC, which is chaired by Robert Napier, chairman of the Met Office, argues for a ‘fundamental rebalancing of the tax system’ based on the ‘polluter pays’ principle.

It wants to double the proportion of green taxes in the overall tax take from the current 7 per cent. The government’s total tax income would not rise because the hikes in green levies would be offset by cuts to income tax and National Insurance contributions.

The report sets out different models for the tax system depending on different commodity-price assumptions and required levels of investment for clean technologies and energy-efficiency measures.

The broad theme is for a raft of new ‘eco taxes’ aimed at curtailing activities, of both individuals and businesses, that use natural resources or create pollution.

Paul Elkins, a professor at University College London and the author of the report, said: ‘It’s really a question of moving a mindset. We’ve had it as a given that energy is cheap, so we have been wasteful. This has to change and the only way to do that is to make the polluters pay.’ Elkins said he was “hopeful” that the recommendations will be adopted by the leading political parties.

Among the most controversial proposals would be a £300 tax on new cars, increasing annually to £3,300 by 2020.

Representatives from the Tories, Liberal Democrats and Labour were closely involved in drafting the report.

The Tories have been briefing power companies on a scheme that would provide £6,500 to every household in Britain to spend on energy-efficiency measures. The sum would come in the form of a low-cost loan to energy suppliers, which would be repaid over several years via contributions through domestic energy bills. (Sunday Times: October 25)

Businesses turn to pay-as-you-go car clubs to cut costs

Thousands of drivers are turning to pay-as-you-go car clubs as businesses hit by the recession scrap their company fleets.

Streetcar, which offers cars for hire in seven cities, announced today that its membership has more than doubled in the past year to about 75,000.

More than 2,000 businesses have signed up to the club, which was founded in 2004 by Andrew Valentine and Brett Akker after they read about a similar scheme in the United States.

The club, which aims to have more than 250,000 members by 2012, has tripled its turnover in the past two years to £19 million. Akker said that it had experienced particularly strong growth among corporate customers seeking to save money by replacing their pool car operations.

Corporate clients include Kellogg’s and Eurostar, and local authorities such as Surrey County Council. The business service operates on the same pay-as-you-go principle that individual memberships work. Members pay an annual fee for a smart card that gives them access to parked cars, which can be rented by the hour.

According to the government-sponsored website www.carclubs.org.uk , car owners who drive fewer than 6,000 miles a year can save up to £3,500.

This month City Car Club bought its rival WhizzGo for an estimated £5 million. The deal gave City Car Club, which has a membership base of 16,000, Britain’s biggest network. WhizzGo was particularly strong in northern locations such as Leeds and Manchester and expanded City Car Club’s network to 15 cities nationwide.

Streetcar operates more in the South, with many of its cars concentrated in London and Brighton.

The expansion of the car club industry is thought to be causing concern to traditional car hire operators, some of whom have started their own versions of the scheme.

Hertz, the world’s biggest car rental group, has launched its own international car share facility, called Connect by Hertz, which offers the service in London, Paris and New York City.

A spokeswoman for Streetcar said: ‘We have noticed an increase in the average length of journeys taken by the membership. Over the summer there were over 5,000 journeys that averaged just under 1,000 miles a trip, which is clear evidence that we are giving traditional car hire a run for its money as well as prompting a general shift in consumer behaviour.’ (The Times: October 26).

Ireland to cut drink-drive limit to 50mg

Ireland will cut its drink-drive limit to 50mg by the end the year, ministers said recently. There will also be a lower limit of 20mg for learner drivers and people who drive for work. The limit now is 80mg alcohol per 100ml blood.

The move will leave the UK and Malta as the last European states with 80mg limits. Road safety charity Brake says that cutting the UK drink-drive limit to 50mg could save about 65 lives and 230 serious injuries a year. ‘Despite this, the Government is dragging its heels.’ Brake says its Road Safety Week from November 23-29 will highlight the risks of drunk and drugged driving. (Brake: October 26).

Warranties key to selling older fleet cars

Customers are seeking higher levels of warranty cover with four-year-old ex-fleet cars that are becoming more prevalent on the used car market, according to RAC Warranty.
An estimated quarter of companies have opted to extend their leases on existing cars beyond the established industry standard three years/60,000 miles to four years/80,000 miles or even further.

Ian Simpson, sales and marketing director at RAC Warranty, explained: ‘The effects of the recession on the leasing and used car sectors have created a market where a customer may find themselves paying a similar price for a four-year-old, high mileage ex-fleet car today as they would have for a three-year-old/60,000-mile one just 12 months ago.

‘In this situation, the feedback that we are receiving from dealers is that the warranty offered with the vehicle is becoming an ever more important part of the deal. The higher mileage especially is making customers wary as is the general condition of some of these vehicles.’

However, Simpson added that it was difficult to predict whether the four-year-old ex-lease car would replace its three-year-old predecessor as one of the mainstays of the used vehicle market. (Fleet News: October 26).

Environment Agency signs up to 2010 campaign

The Environment Agency has cut its carbon footprint by 14 per cent and has now pledged to do even more to reduce its impact on the environment by participating in the 10:10 campaign, which aims to cut carbon emissions by 10 per cent in 2010.

Graham Ledward, director of resources at the Environment Agency, said: ‘By signing up to the 10:10 campaign organisations can demonstrate their commitment to environmental improvement.’

The Environment Agency’s pledge to cut carbon emissions is part of its overall commitment to reduce the environmental impact of all parts of the organisation.

As part of this commitment, the Environment Agency has announced a series of measures, including reducing miles driven internally. Over the last two years the Agency has already reduced its mileage by 8.9 million miles.

In addition, it now has one of the greenest, award-winning fleets in the country.

Graham Ledward, director of resources at the Environment Agency, added: ‘Everyone at the Environment Agency has already taken big steps in reducing our carbon footprint, but we’re committed to making further improvements in the year ahead.’ (Fleet News: October 26).