10/07/2008

Road Users Face Car Tax Hike

Motorists are facing road tax increases of up to £245, the Government has announced.

The Treasury said on Wednesday that almost half of all drivers - about nine million - will be hit with significant rises in Vehicle Excise Duty (VED) on cars with larger engines.

Treasury Minister Angela Eagle said that overall in 2009/10 a third of cars will be better off and approximately 55% of cars will be no worse off.

However, by 2010/11, 9.4 million or 43% of road users will face higher bills, while 1.4 million are set to benefit financially.

Ms Eagle said that owners of five of the UK's most popular cars will pay more - the 2.2l diesel Land Rover Freelander, the 1.6l unleaded Toyota Auris, the 2.2l diesel Honda CR-V, the 1.8l unleaded Vauxhall Vectra and the 1.6l unleaded Vauxhall Zafira.

Analysts have calculated that the Exchequer will have netted more than £1 billion in extra vehicle duty (VED) revenue by 2011.

The AA say the figures confirm their worst fears and shadow chancellor George Osborne has accused Prime Minister Gordon Brown of "misleading Parliament over the car tax information".

Downing Street has rejected that suggestion and has said the aim is to cut carbon emissions.
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Liberal Democrat Shadow Transport Secretary, Norman Baker said: "Tougher emissions targets are clearly to be welcomed, but without real action to meet them they will be meaningless.

"The UK's poor performance so far suggests that we will miss even the EU's lower 2012 emissions target, let alone these tougher targets.

"Without more commitment from the Government today's announcement is just a load of hot air."

The current European Commission target is to reduce carbon emissions from new cars to 130g/kg by 2012. However, Mr Baker has pointed out that the current average emissions for new British cars is 165g/kg, and only reduced by 1.4% last year.

The higher tax estimates, which have been revealed by Ms Eagle in a Parliamentary answer have sparked another row over road tax changes, which have attracted criticism from the Labour camp.

Shadow Chancellor George Osborne in response to Mr Brown's claims that the majority of drivers would benefit from the reforms: "This destroys the government's defence that this is a green tax and in general gives green taxes a bad name".

Shadow Treasury minister Justine Greening said people saw changes to road tax as "stealth" charges.

The TaxPayers' Alliance said the VED rates were a "cynical tax grab".

However, Friends of the Earth said the Government should "stand firm" over its car tax plans.

Currently, the maximum road tax for a vehicle registered between March 2001 and March 2006 is £210. From April 2010 that will increase to £455 for the heaviest polluters.

(DS)

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