Fleet experts have labelled measures in Gordon Brown’s pre-Budget report to cut carbon emissions through incentives on green fuel as bland and ineffective because the fuel is not widely available. Instead of being able to take advantage of these measures most fleet managers are facing hikes in their fuel bills as Gordon Brown increased fuel taxes by the rate of inflation from midnight on December 6.
He also announced that the 20 pence per litre discount that already exists on biodiesel fuels would be extended to the next generation of biodiesel and to any innovative fuels as they develop.
In addition, he announced that he is consulting ahead of the April 2007 Budget on whether to extend the current 40 pence per litre discount for biogas and the level of tax discounts for company cars using high-blend biofuels.
Fleet experts, however, doubt that the announcements will have an impact on company car provision. Colin Tourick, an independent fleet consultant, said: “The issue has never been the size of the incentive, the issue has always been the availability of the fuel. When companies can see that biofuels are as available as other fuels that will be the point†at which biofuel-enabled vehicles are actually able to take off in any significant number.”
Graham Rees, managing director at the vehicle consultancy Fleetworx, who described Brown’s measures as “bland”added: “It is a reasonable discount on the fuel but a normal diesel vehicle will run on 20% biodiesel, [so] you are talking about a 20p saving on 20% of the fuel. The financial arguments are not compelling in that respect.”
An announcement had also expected on the future of Employee Car Ownership schemes, but this has been delayed until the new year. In addition, Alistair Kendrick, a partner at the accountancy firm Wilder Coe, said that an announcement on tax relief for company cars had also been expected in the pre-Budget report, but that this has been delayed until the April 2007 Budget speech.