Labour plans higher tax for motorists

Motorists will face increased taxes under transport policy plans to be announced by the Labour Party next week. Company cars and bigger vehicles will be particularly targeted but details will not be known until after the general election.

The plans also reiterate Labour's commitment to renationalising Railtrack if money is available and say that Labour will turn a new invigorated British Rail, with staff representation on the board, into the first "stakeholder" company.

The policy document, drawn up by Labour's transport team led by Clare Short, the opposition transport spokesperson, puts forward the idea of using the taxation system and transport investment schemes to bring about a shift away from car use and on to more environmentally friendly forms of transport.

The document, which has been through 10 drafts and a lengthy policy sanitising process including Treasury team approval since it was drawn up early this year, avoids any "soak the motorist" statements but nevertheless contains a vital nugget of policy which could be used to bring about a greener transport policy. The key passage says: "A Labour Government will use the taxation system to encourage the shift towards less intensive car use." A specialist advisory group will be set up after the election but the document promises that changes will be made gradually to allow people to adjust their travel patterns.

On company cars, a particularly controversial area where the document has been toned down from previous drafts, it says: "The structure of company car taxation should be reviewed to encourage more energy efficient and environmentally sustainable car use."

In a new move, Labour says it will review the road fund licence system because it "takes no account of the energy efficiency of the car or of the number of miles travelled". Bigger cars and those which are most polluting will pay more, while smaller ones will pay less: but the total raised from road fund licences will remain the same.

Much of the thrust of the 30-page document is remarkably similar to the Conservatives' Green Paper on transport published last month. For example, Labour wants to give councils a bigger role in determining local transport plans and will allow experiments for road pricing. Both parties also eschew the idea of building their way out of the congestion crisis and Labour even accepts the concept of private finance for road schemes.

Indeed, Labour will not reverse any of the principal Tory changes. While the party remains committed to renationalising the railways, this will only occur "in the light of available resources", a fudge which appears to be a sop to the party's left wing, given Labour's likely desire to spend more on health and education, But unlike the Tories, Labour promises a national transport strategy and targets to achieve its aims such as encouraging rail use for both freight and passengers.

The policy document will be presented this weekend to Labour's policy forum of 100 senior party figures in Manchester. However, the forum has no power to make amendments to the document, which is expected to be approved by Labour's National Executive next week.