Budget response from GE Fleet Services

Todayís Budget signalled that the Governmentís environmental agenda affecting fleets is here to stay and will be further reinforced with fiscal measures, believes GE Fleet Services.

Rich Green, managing director at GE Fleet Services, commented:

The environment is the key fleet topic of 2007. It is an area to which companies are now giving much greater consideration thanks to pressure from the Government and the general weight of corporate social responsibility.

However, there has been little guidance from the Government to date on the ideal structure of a corporate environmental fleet policy - but there at least two interesting developments in the Budget.

Firstly, heavy CO2 polluters - mainly 4x4s and large engined cars - are being targeted. While the numbers of these cars found in mainstream UK fleets is already quite low, it is clear that the Government would like them to be reduced further. The quite substantial difference in VED that is starting to open up between band F and G may may prompt fleets to withdraw the latter from their choice lists altogether - but is this differential enough to drive changes in fleet policy affecting these vehicles?

Secondly, we are seeing ongoing support for biofuel in its different concentrations. As far as the standard five per cent biofuel mix that can be used in most engines is concerned, this will soon become more widely available and fleets will use it as this occurs.

Additionally, the two per cent company car tax incentive for high blend 85 per cent biofuels and corresponding reduction in corporate NI that it would bring from April 2008 will only attractive if there is availability of vehicles in this segment. It will be down to developments by car manufacturers and fuel providers as to whether the adoption of this by fleets becomes a viable alternative in the medium term.

However, the wider question that hasnít been tackled by the Government is what structured action should employers take to ígreení their fleet? Thanks to the CO2 based company car taxation scheme, most have already dramatically reduced their emissions of greenhouse gases in recent years but what further steps can be taken?

We expect this to be a subject of great debate over the coming months and indeed years and we believe that for fleets to be have a true environmental fleet policy they will need start to undertake top to bottom reviews of their activities to understand how they can make improvements through a structured green policy similar to the risk management policies that they have adopted in recent years.

Whilst the adoption of hybrid vehicles currently remains marginal in terms of their popularity, and we believe that these audits need to ask more fundamental questions, such as asking which business journeys are really necessary and questioning how driver behaviour affects factors such as fuel usage and vehicle wear and tear?