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The Government believes that economic prosperity must be achieved while protecting the environment to ensure a better quality of life for current and future generations. In particular, the Government is committed to playing a leading role in tackling the global challenges of climate change. It is also committed to improving the local environment in the UK’s towns, cities and rural areas and to promoting an efficient and environmentally sustainable transport system. The Pre-Budget Report announces:

• an increase in all rates of air passenger duty with effect from 1 February 2007, in recognition of the environmental costs of flying;

• an ambition for all new homes to be zero carbon by 2016, with a time-limited stamp duty exemption for the vast majority of new zero-carbon homes;

• an increase in the main road fuel duties in line with inflation; and

• measures to promote the use of cleaner fuels, including support for the development of biofuels.

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