Select Committee on Environmental Audit Written Evidence

Memorandum submitted by British Vehicle Rental and Leasing Association BVRLA

  Thank you for inviting us to comment on your recent inquiry into how the UK Government is working to reduce carbon emissions from transport.

  We do have concerns with the work being done by the Government regarding reducing emissions as there appears to be a lack of clarity and commitment being shown which does not provide encouragement for people to commit to cleaner vehicles. We cannot continue to emphasise just how imperative it is to offer clear signals to vehicle end users and the fuel industry to offer them confidence to invest in vehicles, technology and refuelling infrastructure.

  In particular, significant damage has been done to people's confidence in alternative fuel programmes following the disbandment of the previous incentives and subsidies for early adopters of "LPG". The Powershift programme was administratively cumbersome and onerous for our Members, this does not help Government attract people to alternative fuel vehicles. Other issues with previous programmes have included price practicality and sustainability, together with ease of access to service repair and maintenance were key factors missing that fleet purchasers and users take into consideration when selecting a vehicle.

  The Committee may be aware of the powerful and influential role tax and other fiscal incentives have been proven to play in encouraging a greater use of technology that delivers reduced vehicle emissions. This to date has helped deliver a notable improvement in the environmental performance of both road fuel gases and conventionally fuelled vehicles.

  For example, based on the figures from the Inland Revenue's evaluation report the benefit in kind regime for company cars introduced in 2001 has reduced emissions considerably.

  In the light of this we are surprised that Government is not doing more to encourage take up of EURO IV commercial vehicles. Following the success of the tax incentives offered to car drivers to encourage take up of EURO IV cars we thought it would make sense for equivalent incentives to be offered for commercial vehicles. Especially given the complex technology required for commercial vehicles running on EURO IV. Given the complicated nature of EURO IV we have recently been advising our Members to avoid this technology due to the lack of incentives as there is no way for Members to recoup their costs in investing in EURO IV.

  Our view is that more could be done to encourage take up of cleaner vehicles through low emission zones and future road charging schemes. It appears that all these proposals only penalise the worst offending vehicles rather than offer incentives to the drivers of the cleaner vehicles. By offering incentives to the drivers of the cleanest vehicles this will encourage drivers to go beyond the minimum standard.

  We believe the following factors should be taken into consideration when Government looks at how to ways of reducing carbon emission from transport:

    —    Most of our Member's customers will be tied into long-term vehicle hire contracts and will find it financially punitive to terminate an agreement early. Thus, a clear strategy on the fiscal incentives and support is imperative for any such long term planning and investment.

    —    Fleet policies and budgets are also medium to long term issues and key influencers need the confidence and stability to make long term proposals and decisions.

    —    Dependant on the introduction of low emission zones and changes to both congestion charging and road user-charging rules, we may see a greater movement or even renewed interest in these programmes.

    —    The continuance of the fiscal environmental message of the "less you pollute, the less you pay" principle is likely to result in the disposal of older vehicles. However, it must be noted that such vehicles may not be replaced due to the cost of replacement with a newer vehicle.

  We hope our comments prove helpful and provide a useful overview as to how Government could look to reduce carbon emissions from road transport.

February 2006

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