Ben Webster, Transport Correspondent
2 for 1 tickets to Casablanca, this coming Monday
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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Is this another way so that our MP,s can claim yet more lucrative payments into their gold plated pensions and allowance? These green taxes are a complete con .The amount of tax collected will just be moved into the treasury and used to pay the hidden costs of wars and games.
Christopher Marks, Derbyshire, England
When are we all going to learn? Labour doesn't care how much it punishes us. As long as they are increasing revenue to fund state benefits they are happy. They have to go.
judy, Liverpool, England
Once again, this is ill thought out. Some cars are used for under 3,000 miles per year, and some for over 30,000 miles per year. On this basis a lower taxed car could contribute greater pollution than older less efficient cars which are driven less. This is just another con trick by this Government.
Peter, Brixham, Devon
My car has more windows in it than others, perhaps Id better start blanking them off in case they decide to back tax.
We have two family cars, and BOTH will be paying more VED and worth less!
Labour will pay dearly for this at the next election !
Spineless blues wont revers this though!
Nic Wood, Sandwich, UK
How long must the overtaxed, fed up electorate wait for the headline "Vehicle Excise Duty tax hikes- Gordon Brown's Poll Tax?"
This tax is unfair, badly thought out and penalises large numbers of people who are struggling to get by....a bit like the Poll Tax.
NYChristine, New York, USA
It used to called a Road Fund Licence and the money raised from motorists funded road improvement - benefitting both motorists and inhabitants of towns or villages that were e.g., by-passed. Now it is just an intolerable burden on the motorist that fails to address transport problems or green issues
Paul Bartlett, Taunton,
Don't forget in the budget statement Labour announced an increased "showroom" tax on new cars too. There is no escape! Next will be a vehicle destruction tax so they levy a tax on those that cant afford their car, cant sell it and need to have it disposed of....
M Jeffs, Bucks, UK
Another kick in the teeth for the POOR family ! thank you gordon.
elmars Liepins, plymouth, devon
People who cannot afford to change their cars every 3 years are now to be hit with another stealth tax. Once again, Gordon is hitting the poorest hardest. The value of many older cars will now be wiped out so it will be impossible to sell them anyway. Well done Gordon - another nail in the coffin
Donna Walker, Effingham, England
If my car was 2 months older than it is, I would avoid these rises -even though it's an LPG car!
The insanity is it now becomes cheaper for me to drive down here to Spain (on LPG), convert it to LHD and register it here. I could then use it in Britain again for 6 months at a time if I choose.
Paul M, Puerto del Rosario, Spain
And now they have paid the form of democratic tax bad politics pays. They're sooooo over. Nulabour, same old ending.
So Dave, what will you do, and you in the media, make sure you ask him.
Tom Taylor-Duxbury, Ludlow, UK
Oh well, there goes my car! Thank you very much new liarbour! Now youre happy youve grounded me, will you get some buses on to serve me, or even a train service that stops at my local station at weekends?
No? Well thats it - another housebound pensioner!
BG
Bill Glanvill, Godmanchester, UK
yet another example of labour taxing the poor. if you cant afford to buy a new car, you will pay more tax, and if you own an older car then you lose on it's re-sale value. wonderful.
matt, brighton,
Bit late to start listening.
Simon Marshland, Bath, uk
What amazes me out of all the TAX, TAX, TAX and TAX again (just for good measure), is that the politicians who impose all these taxes to pay for their reckless and illegal wars, then wonder why they are not popular - even with their core voters.
Neil, Gloucestershire, England
Labour have one policy TAX, TAX, TAX. If you need any indication why Labour did so bad at the local elections I suggest they learn to reduce the direct/indirect TAX burden.
Labour's green policy is just another TAX policy!
steve tea, manchester, cheshire
This is not 'Green' taxation it is just yet another stealth tax. Yet again those families on moderate to low incomes will suffer.
Mike, Gravesend, England
Yet again Labour hits those in our society that are on low incomes. I'm not sure they are getting the message! Their core support is leaving them,
Alistair, Edinburgh,