Gordon Brown has unveiled a £55 cut in the licence fee for the least polluting vans.

There will be a £30 cut for the least polluting cars and £35 for the least polluting motorcycles.

During his Budget speech, the Chancellor added that capital allowances for investment in green technology will be 100%.

Electricity produced from clean power stations is to be exempt from the climate change levy.

Mr Brown announced fuel duty incentives for sulphur fuels and invited British businesses to come forward with further plans to encourage new fuels.

Mr Brown said overseas hauliers should also pay their fair share and proposed a distance-based road user charge for lorries, off-set by tax cuts for the UK haulage industry.

Profits from North Sea oil would see a 10 per cent supplementary charge, but Mr Brown said in an effort to "support new investment", first-year capital allowances would rise 25 per cent to 100 per cent, and subject to consultation royalties on North Sea oil, would be abolished entirely.