Ben Webster, Transport Correspondent
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Five million drivers will pay £50 or £90 extra in road tax next year because of the Government’s covert decision to include older family cars in new higher tax bands.
Treasury figures show that a million of those will incur at least another £130 rise the following year, meaning that their road tax will have more than doubled over two years.
By 2010, 16 million drivers will be paying more than they are now, contradicting the Government’s claim in the Budget in March that “as a result of these changes the majority of drivers will be better or no worse off”.
The Times disclosed on Wednesday that the Treasury had quietly abolished the exemption from higher road-tax rates for cars that emit more than 180g of CO2 per kilometre and were registered between March 2001 and March 2006.
Many small family cars, including some models of the Ford Focus, Renault Mégane and Rover 75, will lose their exemption and will cost up to £90 more next year.
Alistair Darling, the Chancellor, claimed in his Budget speech that the reform of vehicle excise duty was designed “to encourage manufacturers to produce cleaner cars” and to “encourage drivers to choose the least polluting car”.
He made no mention of his decision to penalise owners of older cars. These cars will become harder to sell because they will lose up to £1,000 of their residual value as a result of the increases in road tax.
Figures released by the Treasury in response to parliamentary questions by the Conservatives show that 2.4 million drivers will fall into the new Band J from April 1 next year and will become liable for £260 in road tax, up from £170 or £210 this year. Another 2.4 million will be in Band K and pay £300, an increase of £90.
The Government has decided to soften the blow for drivers of preMarch 2006 cars which emit more than 225g/km. Next year, they will move into Band K and pay £300, up from £210 this year. But in 2010, they will move into Band L, paying £430, or Band M, paying £455.
A million drivers will be paying either £220 or £245 extra by 2010 compared with this year.
However, drivers of the smallest, most efficient cars will benefit from the changes. Those buying a car emitting less than 100g/km, such as the Polo Blue Motion, will pay nothing.
The rate for cars emitting less than 120g/km, such as some models of the Citroën C2 and C3, will fall by £5 to £30 next year.
The Treasury admitted yesterday that road tax would increase for most drivers but said for that, for some, the rise would be the rate of inflation “rounded up to the nearest £5”.
It clarified what it said in the Budget with a new statement: “In 2010, around 56 per cent of drivers from the existing stock of cars will be either better off or no worse off in real terms, compared to 2007.”
The road tax changes will result in drivers paying an additional £465 million next year and an extra £735 million in 2010.
Justine Greening, the Conservative Treasury spokeswoman, said: “Labour give green taxes a bad name by using green taxes as yet more stealth taxes. Under the Conservatives, green taxes would be replacement taxes, not new stealth taxes. We will guarantee that promise by putting any increased revenue into a ring-fenced fund, which would entirely be used to reduce taxes on families.”
The Conservatives have not said how much revenue they would raise from road tax, but last September the party’s quality-of-life report proposed a top rate of £500 for the worst gas-guzzlers.
Under the Government’s changes, the £400 top rate for the most polluting cars will rise to £455 by 2010.
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