A new Deal for Transport Better for Everyone The Government's White Paper on the Future of Transport Contents Foreword Acknowledgements Scope of the White Paper part I chapter 1: a new Deal for Transport part II chapter 2: Sustainable Transport Chapter

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Workplace parking
Employees driving to work and enjoying free parking at the workplace account for a significant proportion of peak hour congestion. Controlling the price and availability of parking has been shown by research to be capable of reducing traffic in an area9. Local authorities determine the price and availability of public parking, on and off the highway. But they have little control over existing parking spaces at private business premises. They can use their development control powers to limit the amount of parking associated with new development but, in the past, development was allowed with extensive parking provision, considerably in excess of the standards advocated in current Government guidance.

We believe that new measures are needed to tackle excessive workplace parking provision at existing developments so local authorities can develop comprehensive parking management policies that support their transport and development plans.

We will introduce legislation to enable local authorities to levy a new parking charge on workplace parking. This charge would not apply to residential parking, ie parking at or outside the home. We propose that owners or occupiers of business premises would apply for a licence to allow a certain number of vehicles to be parked on site. The aim is to reduce the amount of parking available as a means of reducing car journeys and increasing use of public transport, walking and cycling. As with road user charging, a vital element in the effectiveness of the policy will be the use made of the proceeds to improve transport choice locally. That expenditure may have to take place in more than one local authority area.

We propose to legislate to enable the parking charge to apply to all types of private non-residential workplace parking, although we will consult on whether there should be any national exemptions (eg for emergency vehicles and Orange Badge holders). There are strong arguments for workplace parking charges to be levied in all types of location, whether in the town centre or at out of town sites, in order to be consistent with our planning policy, particularly on the revitalisation of towns and cities, by influencing individual's travel choice and businesses' location choice.

As with congestion charging, subject to the necessary legislation being in place, we will work with local authorities in developing pilot schemes, individually approved by the Secretary of State (in Scotland, by the Scottish Executive). The effects will then be monitored so that detailed guidance can be developed for further schemes. We will consult further on the details of how the new workplace parking scheme would operate in practice, the implications for local government finance arrangements and for particular sectors of society, including disabled people. We envisage that Regional Planning Guidance would set out the regional framework within which local authorities would be able to exercise discretion on the specific application of the powers to reflect local circumstances. Local authorities would set out their proposals for use of these powers in the local transport plan, showing how a parking charge would support the implementation of their development plan.

Road user charging and taxation of workplace parking will offer local authorities significant new powers for tackling congestion and pollution in their areas. They will also provide those authorities with significant new sources of revenue for funding improvements, for example in public transport, walking and cycling. Local people, business and other interests must be actively involved to ensure that their proposals attract support.

We will ensure that schemes are designed and implemented in ways which support the vitality of town and city centres and do not result in dispersal of development. We will not permit their use as a general revenue raising device. We will start with a strong presumption against allowing both new charges to be levied in the same area at the same time. But we will consider proposals where road user charging was applied in one part of an authority's area, and a workplace levy in another.

We will work closely with local authorities and other organisations to develop guidance on the use of these new powers and to ensure that experience from early pilot schemes informs their application elsewhere. The guidance will cover the needs of disabled people who are car-dependent.

Non workplace parking
Free parking at other developments (eg for customers and visitors to retail and leisure facilities) also contributes to local congestion, both in town centres and other places. This is particularly so for larger retail and leisure developments, although the effects are not as concentrated in peak hours when compared with commuting journeys. Generous parking provision at such places contributes to low density development, often on the edge of or outside towns, that may not be readily accessible other than by car. For new developments the planning policies now being implemented should ensure that car parking space is limited to the minimum necessary and that full provision is made for public transport access. But more needs to be done for existing developments.

We have considered whether non workplace private non-residential parking should also be subject to the charge, but have decided that the pilot schemes should be restricted to workplace parking so that the results can be assessed. In the meantime, we propose to tackle over-dependency on the car for access to other types of development in a different way, building on the initiatives which some major retailers have already taken, for example, by improving public transport access to their stores or through home delivery services. We will seek closer partnership between local authorities and all the major retailers/leisure operators in their areas. The types of development to be covered and the measures to be taken would be proposed by the local authority as part of its consultation on the local transport plan.

In preparing the transport plan, local authorities will have to work with retailers and operators of leisure facilities to identify appropriate measures funded by the private sector to reduce car dependency for access to these developments. Such measures should, in particular, help to ensure that people without a car have access to a wider range of goods and services than at present.

We will be looking for significant progress to be made - especially for larger developments - in the form of better access by public transport, walking and cycling and reduced car dependency for travel to such sites. The measures we envisage are already provided by some retailers and include providing bus shelters and timetable information, funding bus priority measures on the surrounding road network, and providing or supporting bus services to and from the site for customers and staff. Secure pedal cycle parking should be provided as a matter of course. Retail outlets could also extend or introduce easy and affordable home delivery services. These measures would need to be co-ordinated with local authorities' own proposals for improving public transport in their areas so as to maximise the benefits from the contribution of both the public and the private sectors. Local authorities would need to evaluate the impact of such measures on the targets they set in the local transport plan.

We will ask the Commission for Integrated Transport to assess the effectiveness of this approach in meeting the twin aims of reducing the need to travel by car and improving access to goods and services for people without a car.
Sending the right signals
Economic instruments

The price of transport

The Royal Commission on Environmental Pollution noted that the costs paid by transport users do not reflect the environmental damage and disbenefits caused by the use of land for transport infrastructure and by movements of vehicles. These costs include noise, nuisance and pollution. The failure to take these wider impacts into account can result in misleading signals to users, with consequences for modal choice and travel habits. The use of economic instruments, such as pricing measures and taxation, is an important way of influencing travel choice. Such measures can help to ensure that all costs, including environmental costs, are reflected in the price of transport.

We have sent clear signals about the need to use transport more sustainably, consistent with the Chancellor of the Exchequer's 'statement of intent' on using environmental taxes in combination with other instruments to achieve environmental objectives. The March 1998 Budget set out the forward agenda in relation to transport.

We already use duty on different fuels as a way of influencing demand for road transport and as an incentive to consumers to buy more fuel efficient and less polluting vehicles. We are looking at ways of using taxation on vehicles to achieve similar results. More direct charges can also be very effective in influencing demand for travel or the choice of mode [and we described earlier in this Chapter our plans to enable road user charging and a levy on non-residential parking]. The European Commission's Green Paper "Towards Fair and Efficient Pricing in Transport" advocates the use of such measures to promote sustainable mobility and to enhance competitiveness. The Commission's forthcoming White Paper on transport charging is expected to develop this theme further, with long term proposals for a fair and transparent charging framework for commercial operations across the EU.

Cleaner, more fuel efficient vehicles and fuels: fiscal incentives
Increasing fuel duty has proved an effective way of directly influencing CO2 emissions from road transport as part of our strategy for tackling climate change. It encourages drivers to consider their transport choices when planning journeys and when buying, maintaining and using their vehicles; it also provides an incentive for manufacturers to improve the fuel efficiency of new vehicles. We have adopted a strategy of annual increases in fuel duty of at least 6% on average above inflation, 1% higher than the previous Government's commitment.

We will continue to encourage the use of more environmentally friendly fuels. A key to increased use will be industry responding to our lead by much more widespread provision at filling stations. In March 1998, we increased the duty differential between ordinary diesel and ultra low sulphur diesel (ULSD) from 1p a litre to 2p a litre and next year we intend to increase it to 3p a litre. We have also tightened the specification of ultra low sulphur diesel to confine it to the cleanest diesel fuels. Our aim is to reduce emissions of particulates and nitrogen oxides from existing vehicles and over time to encourage the use of cleaner diesel technology. This is an essential element in our strategy to improve air quality, particularly in urban areas. In addition, we are moving towards a fairer treatment of diesel and petrol, based on the energy and carbon content of these fuels. This will mean that the duty on diesel should be higher than on petrol. We began this process in March 1998: duty on diesel is now 1p a litre more than unleaded petrol, and we intend to increase this differential in future years.

London Transport Buses

  • carried out an extensive review of options for reducing emissions and now have a policy of switching all their bus fleet to cleaner diesel such as City diesel;

  • around half of their London services use cleaner diesel and they are working towards 100% use on all routes;

  • oxidisation catalysts have been fitted to 950 buses and a trial of 20 buses with particulate traps is underway;

  • we welcome these initiatives and hope to work with LT Buses and operators to build on these developments.

We have frozen the duty on road fuel gases, following significant reductions in previous Budgets, reflecting the fact that they produce much lower emissions, especially of particulates, than diesel. In doing so, we have widened the differential between these fuels and diesel and we are committed to at least maintaining the differential that existed in July 1997 in order to provide incentives and certainty for potential investors in these new technologies and cleaner fuels. In addition, from April 1999, the cost of conversion of company cars to gas power will no longer be included in the tax calculation of employee benefits.

Government Car Service (GCS)-leading the way

  • GCS decided last year to convert as many as possible of its 150 cars to run on alternative fuels - either Liquified Petroleum Gas (LPG) or Compressed Natural Gas (CNG) over a 5 year period;

  • the decision was taken both on environmental and cost grounds;

  • the newest CNG and LPG vehicles offer lower emissions of regulated pollutants than diesel and petrol and it is cheaper to convert all government cars;

  • GCS will be closely monitoring the environmental performance of vehicles with a programme of emissions tests;

  • this initiative will be important in stimulating the market for gas fuelled vehicles and reducing pollution.

We have introduced legislation in the 1998 Finance Bill which will provide an incentive for cleaner vehicles through the vehicle excise duty arrangements (VED) for lorries and buses. From January 1999, lorries and buses producing very low particulate emissions will receive an incentive of up to £500 off VED rates to encourage owners to achieve tough emissions standards: for example, by fitting particulate traps to vehicles, fitting higher standard engines or switching to road gas fuels.
We will extend our reform of vehicle excise duty by introducing a new system of graduated VED for cars from next year, which will include a new lower rate of £100 for the smallest and least polluting cars. We will consult on the details shortly. Our aim is to encourage motorists to take account of environmental impact when buying new or second hand cars. In the meantime, we have frozen VED for cars and lorries, representing a fall in real terms, and helping to shift the burden of taxation from car ownership to car use. The freeze on VED for lorries should also help maintain the competitive position of UK hauliers and partly offset the impact of higher fuel duty.

The Chancellor has already announced that he will review the system for setting VED rates for lorries to ensure that the environmental damage they cause is reflected in their VED rates. This review will take into account the wider environmental impacts of lorries as well as their physical effects on the road infrastructure. The present system does not, for example, take axle loading, which has a substantial effect on road wear, properly into account. With the introduction of new lorry weights (see Chapter 3) it will be particularly important to ensure that those operating vehicles with 11.5 tonne maximum axle weight pay a rate of VED commensurate with their increased road costs in comparison to vehicles operating at a maximum of 10.5 tonnes. This review will therefore consider the VED rates for these new lorry weights.

Local bus services have benefited from a scheme for Fuel Duty Rebate (FDR) since 1962, designed to avoid increases in fuel duty feeding through into fares. This was worth some £230 million annually to local bus services. This year, for the first time since 1993, we are increasing the rebate by £40 million in line with the duty increase on diesel, to protect bus operators from this year's fuel duty increase and ensure that the cost of bus travel rises by less than the cost of motoring. We will consult shortly on our plans to target Fuel Duty Rebate on rural services and on more environmentally-friendly vehicles.
Company cars
Company cars account for almost 20% of car mileage and over half of new cars are first registered in a company name. Company policy on the purchase and use of company car fleets is therefore important for the environment. Company cars are generally much newer and better maintained than the average private car and therefore less polluting per unit of fuel consumed. However, they tend to have larger engine sizes than the average private car and as they account for a high proportion of the new vehicle fleet, they contribute to higher overall average fuel consumption both directly and through their influence on the stock of cars in the second hand market. Around 1.65 million company cars are available for private use. These drivers also tend to drive significantly further to and from work and those who receive free fuel drive further still.

We recognise that some drivers have to use a car because of the nature of their work. However, the existing system for taxing company cars has been criticised as providing a perverse incentive to drive further in order to reach the business mileage thresholds which attract significant reductions in the tax liability. In the March 1998 Budget, the Chancellor announced that he would be considering the case for replacing the existing business mileage discounts with discounts for driving fewer private miles in company cars, and invited people to send comments to the Inland Revenue. So far, a wide range of organisations and individuals have responded.

The current tax system for employees who receive free fuel from their employers for private use (about half of all company car drivers) has given them little incentive to reduce their private mileage, as the employee pays the same amount of tax whatever the amount of private mileage driven. It is important to send consistent messages about the need to reduce unnecessary journeys and improve fuel efficiency. We therefore announced in the March 1998 Budget that we will increase the scale charges for employees provided with free fuel for private use by 20% each year over and above normal increases up to 2002/3 to discourage employers from providing free fuel.  
Incentives for green travel
We recognise the interest that has been shown in the role of tax incentives in encouraging more environmentally friendly forms of travel, particularly in supporting green transport plans by employers for their staff - for example, through new tax incentives for public transport season tickets. At present interest free loans of up to £5,000 provided by employers for the purchase of season tickets are not taxed as a benefit in kind. An important issue is how employers and employees would respond to further changes in the tax system, and the relative impact of tax measures compared with other factors. We therefore intend to undertake research on the importance of such factors, including the influence of the existing tax system with a view to seeing whether changes could be effective in promoting green transport plans.

Not all employers may be aware of the possibility, under the present tax system, of offsetting against taxable income, expenditure they incur in encouraging their employees to use green transport - such as the running expenses of a bus or coach to bring employees to work. Capital allowances may be available for capital expenditure. But where such benefits are provided, employees may face an income tax charge. The Inland Revenue intend to publish further guidance on the tax rules later this year, and in the meantime employers should check the position with their tax offices at an early stage in their planning.

Setting standards  
Setting higher environmental standards for vehicles and fuel has made a significant contribution to reducing the harmful effects of emissions from road traffic. Further improvements at the EU level will be necessary to achieve our objectives for reducing greenhouse gas emissions and improving air quality. We will continue to work closely with the European Commission and other Member States to secure this.
Cleaner, more efficient vehicles and fuels: standards
The European Auto-Oil programme provides for improvements in vehicle technology and fuel quality through higher standards. Tighter emission standards for new cars and light vans will apply from 2001. These will be 20-50% more stringent than those currently in force. Technical improvements to maintain the emissions performance of vehicles throughout their life will be required from the same date.

Improvements in the design of lorries have resulted in gradually improving energy efficiency with lower pollution emissions. At the European level, the introduction of emission standards for new lorries in 1991, 1992 and 1996, together with the proposed standards for 2000 will reduce emissions still further. But in the longer term even with the introduction of these standards and those for lighter vehicles, continuing growth in road traffic could start to erode the benefits in terms of air quality.

Auto-Oil will also lead to a further tightening of emission standards for 2006 and beyond. This may represent a reduction of up to 50% on the 2001 standards. The position for lorries and buses is similar, although the new controls will be applied slightly later.

Under the Auto-Oil programme, cleaner fuels will be required from 2000. These fuels will assist in the achievement of the new vehicle standards as well as reducing emissions from the existing fleet. Significant improvement in fuel quality will also be made in 2005. These will allow the use of the clean vehicle technology required to meet the 2005 vehicle standards.

We support the European Commission's strategy which aims to reduce emissions of CO2 from new cars to an average of 120 grammes per kilometre by no later than 2010. This represents an improvement of about a third on the current average. The strategy was agreed by the EU Council of Ministers in June 1996 and as part of this strategy, the Commission is negotiating a voluntary agreement with European car manufacturers to improve fuel consumption.

We consider that more can be done to reduce the environmental impact of freight distribution and we will support continued research into more efficient vehicle design and the use of alternative fuels.

Better air quality
Our policy for improving air quality is set out in the National Air Quality Strategy. This sets air quality objectives derived from health based standards for eight pollutants to be achieved by the year 2005. We are currently reviewing the strategy and aim to produce conclusions by the end of 1998.

The concentration of air quality problems in busy urban areas with high levels of road traffic means that national measures to improve vehicle standards and fuel quality will often have to be complemented by local action.

A key tool for delivering the National Air Quality Strategy is the new system of Local Air Quality Management. Local authorities have a duty to assess air quality in their areas to determine whether the objectives set out in the Strategy, and prescribed in the Air Quality Regulations 1997, are likely to be met by 2005. Where a local authority considers that one or more of the objectives is not likely to be met, as a result of national measures alone, it must declare an air quality management area, covering the area where the problem is expected.

For each air quality management area, an action plan must be drawn up by the local authority, in consultation with the public and with organisations such as the local health authority, the Highways Agency, the Environment Agency and the Scottish Environment Protection Agency. The purpose of the action plan is to identify measures which will help to achieve the air quality objectives for the area and a timetable for their implementation.

Many air quality management areas are likely to be places where most of the pollution comes from road transport. Proposals to reduce emissions from traffic will therefore feature in the majority of air quality action plans. Many of these proposals will also relieve congestion and noise, help local authorities to meet road traffic reduction targets and will therefore form part of the local transport plan.

Air pollution does not respect national boundaries, action at the European level is therefore also important. The framework for improving air quality across Europe is set out in a Directive, which provides for limit values to be agreed for twelve pollutants. During our Presidency of the EU, we have secured a landmark agreement on legally binding limit values for three pollutants to which road transport is an important contributor - nitrogen dioxide, particles and lead10. This agreement will bring real benefits to the people of Europe, ensuring a high level of protection for people who are particularly vulnerable to air pollution.

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