Green lobby is disappointed by easy ride for motorists

Motorists were given a relatively easy ride by the Budget, while environmentalists voiced deep disappointment with it. Gordon Brown deferred a 1.3p-a-litre increase in petrol and diesel duties until 1 October, pledging that he would extend the freeze if international uncertainties persisted.

The Chancellor increased car tax by £5 from 1 May but froze the rate for lorries and motorcycles. Insurance premium tax would also remain the same. The Chancellor said there would be a new, lower tax disc rate to encourage the "greenest" cars.

The AA Motoring Trust welcomed the temporary freeze on fuel duty but expressed disappointment that the Chancellor had increased road tax.

John Dawson, director of the AA Motoring Trust, said: "We hope that the Chancellor will continue the fuel duty freeze past his October deadline and extend it to the lifetime of this Parliament. We agree that an increase at this time of volatility in the oil market would be unwise, but equally we must not forget that we still have the highest fuel taxes in Europe."

Mr Dawson said he was pleased with the continued freeze in insurance premium tax. "Any rise could only have fuelled the worrying recent increase in the number of uninsured drivers, currently estimated at 1.5 million," he said.

Edmund King, executive director of the RAC Foundation, urged the Government not to increase fuel duty until there was a firm commitment to improving public transport. "Motorists will not accept more taxation without better transportation," he said.

Referring to the freeze on diesel and vehicle excise duty, Richard Turner, chief executive of the Freight Transport Association, said: "This is exactly what we asked the Treasury to do. An increase of 1p per litre on diesel costs UK industry £135m per year. When oil prices are volatile an immediate increase in fuel duty would have been an own goal on UK industry.''

Mr Turner pointed out that the Chancellor promised an additional £5bn a year on transport spending. "We await with interest details of how this £5bn will be spent," he said.

Friends of the Earth said the Budget was "deeply unambitious and disappointing". Mr Brown had acknowledged the need for green tax reform but had done little to protect the environment. He had weakened previous environmental measures, such as air passenger duty, the climate change levy and fuel duty, by freezing them at last year's levels.

Freedom to Fly, an aviation and tourism coalition, expressed "relief" that air passenger duty is to be frozen. Dan Hodges, director of Freedom To Fly, said: "The Chancellor has given the industry a breathing space in the middle of what everyone acknowledges is a difficult and testing time. It is important that government has recognised the potentially serious impact of increasing the tax burden on a sector still confronting the dual effects of 11 September and war in the Gulf."

Don Foster MP, the Liberal Democrats' transport spokesman, criticised the Chancellor's failure to mention public transport. Mr Brown had missed the chance to give public transport a boost, he said. "Extra investment, targeted where it is needed and tightly controlled to ensure better value for money, would bring our railways into the 21st century."

Case study

The company car user

Patrick Bradshaw

Sales manager

Home: Banbury, Oxfordshire.

Age: 34

Family: Wife, Henrietta, 32; two children, Henry, 5, and Benjamin, 2.

Household income: £100,000.

Savings: £20,000 in building societies.

Company benefits: Company car ­ Volvo.

Outgoings: Pension provision of £200 a month (is not paying into company scheme but intends to contribute £200 a month).

Politics: Traditional Conservative voter. Has been impressed with the Chancellor's handling of the economy. But will not change party allegiance.

Hopes from Budget: Pessimistic. Felt New Labour was not interested in families on high incomes.

Actual effect of Budget: £975 worse off because of the increase in national insurance ­ £775 a year ­ and an increase in the tax on company cars of £200.

Reaction: Unimpressed with the increased tax on his company car. He does not intend to switch to a greener fuel.

"The cost just makes you have a worse feeling about the Government rather than encouraging people to switch to a more environmentally friendly alternative."