Wednesday, September 26, 2007

Big stick - minuscule carrot

According to AutoExpressNews the chancellor is intending to impose a big levy on those who would purchase 'gas-guzzlers', a term which I don't particularly like as it unfortunately hits a large number of people who have little option but to use off-road vehicles, such as farmers.

The source is a supposed leaked Treasury document which outlines a suggested £2000 purchase tax levy, OR, a Vehicle Excise Duty first year increase of £1300, on all vehicles that emit more than 254g/km of CO2 .

"All cars in this category – including the entire Range Rover line-up, all Porsche 911s and most versions of the Mercedes S-Class – would be hit by the proposed £2,000 levy."

Now that's a pretty big stick; but I have to question how much it is intended to ameliorate CO2 emissions as opposed to how much revenue it might generate for the Treasury's coffers? The other point that needs to be made is that anyone who can afford a brand new Range Rover, Porsche 911 or Merc S Class can afford to pay that sort of sum without blinking anyway.

Oh yes, I nearly forgot, the carrot. For those purchasers who buy vehicles that emit less than 100g/km of CO2 there will be a 'rebate' of £2000 (off what? .... the purchase cost, or in ongoing VED reductions?).

OK, that sounds like a nice bit of encouragement to purchase a low emitting vehicle. Unfortunately it leaves you with a choice of either an entirely electric car, such as the G-Wiz, or the one and only current combustion engined vehicle that meets that target, the VW
Polo 1.4 TDI BlueMotion.

Sorry, but this is tantamount to a large scale tax grab whilst holding out a minuscule and almost worthless carrot to purchase low CO2 emitting vehicles. What's the betting that as sales of the Bluemotion take off, the Treasury suddenly decides to reduce the 100g/km to something like 80g/km?

ADDENDUM (from Junkk Male) -

Sorry, it's easier for me to add a link here: CAR INDUSTRY THREATENS AD EXODUS OVER CO2 WARNINGS

I have to agree with you, Dave. At best this seems a silly little (and not very original) piece of political point scoring with no real downside (I doubt most owners to be affected are Labour voters. Not just on money terms, either. Here in the boonies the 4x4foraliving guys are not exactly Brownian in their voting motions!).

And, as you say, who trusts (that word) the carrot?. I still hover on an LPG conversion which is already not good on ROI, but if the tax on the fuel gets nudged up because it proves too popular I'm stuffed!

As to the ad piece above that doesn't make sense, unless they are accepting that such things don't help sales. A silly knee jerk in my view, not that I think popping Co2 labels on will make a blind bit of difference.





3 comments:

Anonymous said...

Dave,

There are some more widely-available carrots available too: we took a friend car-shopping the other day, who got a Peugeot 107, which has £35 a year road tax because of its low CO2 emissions......

Lawrence

Anonymous said...

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Dave said...

Lawrence, you are right. I forgot that they had already brought in the scaled down VED on low emitting vehicles. Having said that, it is only a small reduction from the normal VED in relation to the possible proposed 'gas-guzzler' purchase tax, so it is still a small carrot.

And there are lots of strange anomalies - my friend's 30 year old Jensen is VED free, yet I'll bet its one of the worst emitting vehicles on the road!

I cannot see the proposed measures as anything more than an additional tax grab.