§ Bob Spink:To ask the Chancellor of the Exchequer if he will make it his policy to create fiscal incentives for cleaner vehicles by co-ordinating rates of taxation on benefits-in-kind with the Government's Air Quality policies. [131687]
§ John Healey:It has been a long-standing policy of the Governments to introduce cost-effective measures to help reduce the impact that transport has on the environment.
To incentivise cleaner cars, the Government have introduced emission-based reforms for graduated company car tax and fuel scale charges—the charge on free fuel provided for employees. These CO2-based benefit-in-kind taxes have helped reward the purchase of cleaner cars and the progress made is reflected in the 3.75 per cent. fall in average CO2 emissions of new cars between 2000 and 2002.
In addition to progress on CO2, local air pollution has improved dramatically with falls in emissions of particulates and NOx from new vehicles, for example new cars now produce in the region of 90 per cent. less pollutants than those manufactured 20 years ago. This has been driven by successively tougher emissions standards for new cars and given that company cars are generally less than two years old, means they are delivering air quality improvements. To help facilitate this progress, the Government have incorporated air quality incentives into the company car tax regime. There are discounts for cars that use alternative fuels and technologies, for example road fuel gases, and supplements for diesel cars in recognition of their higher emissions of pollutants that damage local air quality. This approach helps ensure there are benefits for the drivers of the very cleanest cars along with benefits for the environment.
Furthermore, to provide incentives for the use of alternatives to the car, in 1998 the Government announced a package of measures, which included removal of benefits-in-kind charges on employer-provided works buses and on public bus subsidies, and new reliefs for commuter and business cycling.