Sam Coates, Chief Political Correspondent
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Plans to raise vehicle excise duty for the most polluting cars will not cut carbon dioxide emissions as much as hoped, a cross-party committee of MPs will say today.
The House of Commons Environmental Audit Committee has said that the proposed changes have been poorly explained and communicated, and the projected carbon savings from the plans were “less than they could be”.
The Treasury should pay more attention to communicating the details and objectives of the duty and other environmental taxes in the future, and should examine the case for a more ambitious reform of vehicle excise duty (VED), the report added.
The committee was looking at the controversial tax following the announcement in this year’s Budget that VED rates were to rise for existing cars with higher emissions registered since 2001.
The committee said that attention had since focused on the 1.1 million high-carbon cars, registered between 2001 and 2006, that will have their VED more than doubled, from £210 to £430 or more.
The Government began varying road tax rates in 2001, but did not introduce the band G rate for cars that emit more than 225g/km until March 2006. In the Budget that year, Gordon Brown, then the Chancellor, said that no car registered before March 23, 2006, would have to pay the higher band G rate.
However, The Times revealed in April that when new bands were introduced by the Treasury this March it also abolished the exemption for these older cars that emitted the higher amounts of carbon dioxide from the highest rates of vehicle excise duty.
Motoring groups and other organisations said that it was unfair to penalise families who bought cars several years ago, when people knew less about the consequences of CO2 emissions.
In an interview with The Times, Alistair Darling, the Chancellor, made clear that the rise in vehicle excise duty was still under review. “It is important that there’s a clear environmental signal, but we have to be mindful of the fact that we are all taxpayers, we are all motorists.”
The MPs said that they strongly supported the Treasury’s use of VED as an environmental tax and welcomed the changes announced in the Budget.
The report said: “We are surprised that the Treasury has risked provoking political opposition for an environmental measure which, according to its projections, is of limited benefit.”
The committee was disappointed “that the Treasury had not calculated what the impacts of the [VED] Budget [changes] will be on emissions from secondhand cars, when this was one of the main objectives of the changes”.
MPs said that a failure to advertise green tax details to the public “breeds suspicion about their objectives, increasing the perception of them as revenue-raising measures with no environmental purpose”.
MPs also said that the Treasury should consider a “car scrappage scheme” to offer the drivers of high-emission cars a payment to trade in their vehicles for more efficient ones.

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This is nothing to do with being green - none of these so called green taxes actually get used for green issues. They just go straight into the treasurey coffers to shore up their excessive spending. We already pay as you go - the more milage, the more fuel, the more fuel duty you pay!!!
Chris, S'bury,
Perhaps I didn't make it clear that Annual Road Fund tax should be scrapped, and all the costly administration that goes with it. The more you drive, the more tax you contribute to the Treasury. As pensioners we only use our car two or three days a week. The more you drive - the more you pay.
Roger Stubbs, Shirley, Solihull, W.Mids UK
The Spanish Govt. has it right. They have greatly reduced the taxes on NEW cars; eg up to 120 G/Km NO TAX, and have put it onto the high polluting cars so the tax collected is still the same. Freedom of choice but you pay or save. Plus reduced interest for loans on new cars. Britain so behind.
B J Deller, Marbella, Spain
Of course the plan to raise VED won't do much to reduce CO2 - but it will raise lots of nice new tax money for Gordon to waste. Poorer people aim to keep a car for about 10 years. It is unfair to tax them retroactively. VED shd be scrapped & the tax shd go on fuel & new 'high CO2 car' purchases.
Donna Walker, Effingham, England
Your programme today had a lot on green cars. But what about MAGDRIVE a device that reputedly reduce car emissions AND fuel consumption. I believe that more could be done in this direction with less BFM on green and CO2.
I suspect that the intrepid investigative journalists are not iterested
M. Cawdery, Craigavon, Co. UK, EU
Following the credit crunch the following has happened:
1) House values have fallen, many are now in negative equity.
2) Unemployment has risen, more loan defaults.
Now the Labour goverment propose to mass devalue cars and create yet more problems for the economy.
Thanks Labour.
Aaron, Birmingham,
So how exactly does making a new Nissan Micra from scratch prove to be better for the environment than simply keeping my six year old hatchback on the road? Sadly, I cannot afford to find out.
This cynical "green tax" will push me into the welcoming arms of whichever party promises to kill it.
Paul, London,
in 20years time when this global warming nonesense willhave been shown to have been just that, nonesense,a lot of people will have starved and a lot of people will look pretty silly
peter c, devizes, wessex
Perhaps in the UK we could have an incentive to remove the older, polluting cars permanently from the roads though the Government giving various financial incentives to the buyers of these cars to buy newer, smaller, more modern, safer and less polluting cars, as happens in Italy.
Peter, London, England
I want to downsize to a cleaner car but now the market does not want my vehicle and I will have to pay a hefty sum to make up the loss. At present it is cheaper for me to drive something which gives less than 25mpg and pollutes more, than something that does 65mpg and does not. FALSE ECONOMY!!
Dr N S Khosa, Durham,
Brilliant scheme by the govenment !! One small flaw however, tax collection does not magically reduce airbourne CO2 content, trees do! A motorist pays the 400 quid, he is free to drive around as much as he likes, and he probably will, getting his pennies worth... could always plant a few city trees?
Carlos L'Jakal, London , UK(nanny state)
The lunatics have taken over the asylum.
Whoever voted these idiots in all those years ago should be gentley and quietly escorted out of the country,
chris, rochdale,
They just don't get it and they don't want to listen. But mark my words for those buying lower emitting cars, be warned your tax will not stay low for long.
For those who drive those hideous electric cars, you sould be taxed because you use enviromentally dangerous lead batteries.
Lyn, London,
Why go on about car pollution, when cars are obviously needed for day to day living, whereas planes used just for holidays and business trips (prime minister trips which could be done over a web cam) are not needed, ban holiday planes! Less pollution and terrorists
Darren, Plymouth, England
A fair car scrappage scheme enabling car owners to trade in tomore carbon friendly cars would be very good even if it meant having my beautiful Jaguar crushed.
d.r.bailey, Poole, England
I have a better idea.
Instead of wasting millions of pounds on tax schemes that don't help the environment, how about giving government grants to poor families so that they can afford to buy a more 'greener' car.
J. Septsons, Surrey,
Roger Stubbs idea of raising fuel duty is wrong .It would be inflationery and disastrous.High VED on the culpable vehicles would eliminate them without inflation
donald bailey, Poole, U.K.
I can't sell my car now as it has no valuse and therfore I can't aford to buy a smaller one. It is cheaper to pay the tax! How does this help anyone.....
Mark, Solihull,
Roger says: "The correct way to collect Car Tax is for the price of fuel, both Diesel and Petrol, to have a premium added to the cost of fuel." Have you not heard of fuel duty Roger? Fuel duty also has VAT applied to it (tax on tax). With the price of fuel we should be scrapping road tax!!!
Simon, Aberdeen,
The higher the car tax the greater will be the number of non payers and more wasted time spent by police on VED tax checking, rather than policing more serious crime. Put the tax onto the fuel. It is fairer, the more you use the more the polluter pays and the more the government collects.
Gerard, Manchester,
The govenment will tax cars off the road, then winge when the big car producers leave the UK.
What happens when we all drive green cars, what will the govenment tax?
We need to find alternative fuels and Biodiesel does not work.
The petrol companies are aware of them but they are not profitable
Stuart, wallasey, merseyside
So how do afford one of these green efficient vehicles? I know I will use my endless expense account or big city bonus paid for by the Tax payers. Damn I can't afford one, I forgot I'm not a banker or politician and have to live in the real world. At least we have the best overlords money can buy.
Geoff Jarvis, Bath,
The truth is this Government plays the "Green" card to justify everything they do which is unpopular.
We don't buy it Gordy!!!!
This is purely another revenue raising policy from this bankrupt Government which would add another nail in their coffin if it wasn't already full of nails already.
Scott, Edinburgh,
The correct way to collect Car Tax is for the price of fuel, both Diesel and Petrol, to have a premium added to the cost of fuel. I can foresee that there will be hundreds of motorists who will not pay the tax. If the Government uses this method it will be fairer, and EVERYONE pays the tax.
Roger Stubbs, Shirley, Solihull, W.Mids UK
It would make more sense to make public transport free.
jason palmer, london,
Stephen Holmes' comment is so small-minded and blinkered it's quite frightening. Just because he has no use for a large 4x4 vehicle is it so inconceivable to think that others might actually 'need' one!
Some drivers of 'off-road' vehicles do actually drive 'off-road'.
Dez, Billericay,
Why not raise the tax according to post code, if you live in a city and only use a 4 x 4 type for the school run then you should pay more than a rural user or crofter/farmer who needs such a vehicle. Price all 4 x 4's of the road ? - would you be happy they were replaced by tractors rurally.
Dave, Aberdeenshire,
I have a car which produces a large amount of CO2. Following the announcement of the VED rises, I tried to sell my car, but found that the value of the car has now plummeted so considerably, it's cheaper for me to keep the car, and pay the tax. How does this retrospective tax help the environment?
Seth, London,
The ugly 4X4 monster vehicles that pass for cars should be priced off British Roads.
The drivers of these vehicles have been sucked in by all the hype of thinking they're driving on a lunar landscape.
I even think that a seperate driving test should be considered for owners of these vehicles.
Stephen Holmes, Withington, UK
It was never meant to cut carbon dioxide output. that was the excuse. The real reason was to raise the tax take as no other taxes were decreased.
eddie reader, birmingham, england
I smell the beginning of yet another 'U turn'. Why can't GB just say, "I was wrong"
Mike, Sole Street, England
1. A large engined car produces no more daily pollution than a small engined one - until it moves! Fuel duty already hits the heaviest polluters, so this is just a mean tax.
2. Scrap the year lettering scheme for no. plates, as these encourage people to replace their cars when they don't need to.
Mike Hart, London, England
My car was a major investment that I intend to get a full life from. I fail to see how paying people to scrap older cars is in any way 'green'. How much energy was spent building the car? How much pollution created and energy spent scrapping it? More idiocy from a government obsessed with spin.
Andy, Hamilton, South Lanarkshire
I have a better idea, cap the sale and production of new cars, but that will never happen because it has an impact on their wealth not on the wealth of car owners.
Lenny Szrama, Gateshead,