Budget 2008 marks beginning of "cohesive environmental strategy" says GE Fleet Services

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 GE Capital Solutions, Fleet Services.Gary Killeen, commercial leader at GE Capital Solutions, Fleet Services, commented:"Taking the Budget and the King Review together, it looks as though we have the beginnings of a cohesive environmental strategy for cars in the UK that covers both fleet 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 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 fleets - 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 - and we believe that this is a fairly practical figure that many 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."In the shorter term, it is pleasing to see that the Government has slightly tempered its promotion of biofuels since the last Budget. While both the Chancellor and Professor King seem keen to encourage a wider use of biofuels in the general fuel mix, there is also recognition that more discussion about them and their probable total environmental impact is needed."The 2008 VED increases will also have an ongoing small but noticeable effect in encouraging fleet adoption of greener vehicles in the short term, as will the revised emissions-based capital allowances system for company cars - although 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, it is encouraging that Professor King recognises in her review the contribution that fleets have already made to cutting CO2 from road transport and the influence that they will wield in the future."There are only a few sour notes. One is that Professor King believes that, unless we undertake large scale land use change to encourage biofuel production, we will only see a 10% reduction in CO2 from vehicles in the next decade. Another is the fact that national road pricing appears to be back on the agenda for the longer term with the Government putting funding into more research in this area."Thirdly, although we are surprised that there has been no change to AMAP rates, we welcome that the Government's review has now been concluded and can appreciate the challenges and complexities that were involved.  We would, however welcome a longer term statement from the HMRC going forward to cover this area."

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