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EDITIONS
Budget 2001 Wednesday, 7 March, 2001, 17:48 GMT
Motorists get duty cuts
A petrol pump out of fuel
A cut in fuel duties and road tax for lorries and millions of car drivers was at the heart of Chancellor Gordon Brown's package for motorists.

The rate of duty on ultra low sulphur petrol is being cut by 2p per litre from 1800 on Wednesday, a change Mr Brown first announced in his autumn pre-Budget report.

Motorist measures
Ultra low sulphur petrol duty cut by 2p per litre
Unleaded fuel duty cut by 2p per litre until 14 June
Lorry licences cut by 1000-2,100
Road tax cut by 55 for all vehicles under 1500cc
Duty scrapped for tractors
Duty cuts for a range of alternative fuels

But because ultra-low sulphur petrol is still not available at all petrol stations, the 2p per litre cut in duty is extended to unleaded petrol until 14 June.

Mr Brown said that by then it should have been replaced at most fuel outlets by the more environmentally friendly ultra low sulphur petrol.

The cuts will take the price of a litre to between 72-76p, depending on the individual filling station.

There were also cuts in Vehicle Excise Duty (road tax), with five million more cars with engine sizes below 1500cc getting the 55 discount previously restricted to engines below 1200cc.

Alternative fuels

The extra cars now paying the lower 100 road tax rate - backdated to last November - will include vehicles such as many Ford Escorts, Vauxhall Astras and Nissan Micras.

For hauliers and lorry drivers, who led the petrol protests which brought the UK to a near standstill last September, there was the promise of a 300m reduction in lorry licence rates next year.


...a populist gesture that simply undermines the Prime Minister's bid for environmental credibility

Friends of the Earth verdict

Mr Brown said this would bring tax rates down to match the lowest in Europe and save 115,000 vehicles more than 1,000 a year.

For hauliers who travel outside the UK it would mean savings of between 1,500 and 2,100 per year.

He said these changes were being achieved by "sweeping aside" 100 different lorry licence rates and consolidating them into seven rate bands.

The chancellor's measures were intended to persuade motorists and hauliers not to resume protests.

Mixed reaction

As announced in his pre-Budget report last year, road tax will be scrapped for all tractors and agricultural vehicles.

There were also tax cuts for alternatives to petrol, with a 6p per kilogramme cut in road fuel gases and a 20p cut for bio-diesel.

Motoring organisations, such as the RAC generally welcomed the cuts, but fuel protest leader Brynle Williams, who wanted an 8p per litre cut in fuel duty, said they were a "sham".

Trevor Savage, of the People's Fuel Lobby, said: "We shall have to protest, we have no option, we'll have a meeting, but I feel sure it'll lead to a protest."

The Automobile Association welcomed the moves but said it was disappointing that Mr Brown had not pledged to freeze petrol taxes beyond 2002.

Friends of the Earth said the cuts were "a populist gesture that simply undermines the Prime Minister's bid for environmental credibility".


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See also:

08 Nov 00 | Business
03 Jan 01 | Business
Links to more Budget 2001 stories are at the foot of the page.


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