A new, so-called “green levy” on UK motorists has been denounced as yet another revenue-raising tax on car drivers which the government’s own figures show will have a minimal effect on the environment.
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According to the Daily Telegraph newspaper, the new tax regime, announced in UK chancellor (finance minister) Alistair Darling’s first Budget last month, will double car tax revenue to GBP4bn but reduce vehicle emissions by less than 1% according to the Treasury’s own figures.
“The car tax increase is the latest example of policies that may be unpalatable being repackaged as environmental measures,” the paper said on Wednesday.
The chancellor announced a significant increase in car tax in March which will result in the owners of family cars, estates (wagons) and people carriers (minivans) paying hundreds of pounds a year more to use UK roads.
According to the Telegraph, Darling claimed that the duty increase was designed to encourage motorists to switch to greener cars and to reduce the environmental impact of driving.
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By GlobalDataBut the paper said it had seen Treasury projections which disclose that while the amount raised from car tax will more than double – from GBP1.9bn to £4.4bn by 2010 – carbon dioxide emissions from motoring are expected to drop by less than 1%.
Justine Greening, a shadow (opposition party) Treasury minister who obtained the figures, told the Daily Telegraph: “This is a massive tax hike which will have virtually no impact on the environment.
“Despite their claims, the government don’t expect this move to change behaviour at all – it is just another eco-stealth tax of the worst kind.”
The paper said some of the biggest tax increases are planned for drivers of mid-range family cars, including some models of the Ford Focus, the Renault Espace and even B-segment ‘supermini’ Nissan Micras.
However, the tax rises for Porsches and Rolls-Royces will be less – leading to allegations that poorer people are again being selected by a Labour tax measure, the paper added.
The government has just climbed down after eliminating a low tax rate in the same budget, prompting a back-bench revolt.
The opposition Conservative party has predicted that increasingly embattled prime minister Gordon Brown would face a revolt similar to the 10p tax protest when ordinary motorists encounter the large duty increases next year and complain to their MPs.
The Daily Telegraph said the Budget overhaul of the taxation system for cars – known as vehicle excise duty – claimed the “majority of motorists will be better or no worse off in 2009”.
However, that claim has been undermined by analysis showing that nine out of 10 vehicle models will be taxed more heavily from next year, the paper said.
Under the new scheme, cars will be divided into 13 groups for road tax purposes depending on their CO2 emissions. Annual road tax will then be charged at up to GBP440 for cars such as Jaguars, Range Rovers and even some people carriers/minivans, emitting more than 255g of CO2 per kilometre.
Cars producing less than 100g will not be taxed.
At present, there are seven bands, with the least green vehicles paying a maximum of £400. Some family cars will move up several bands, the Daily Telegraph said.
The paper said the result is tax on a Vauxhall Astra 2.0i 16v or 2008 Saab 9-3 will more than double, from GBP210 to GBP430 while the owner of a Ford Focus 1.6 Duratec will pay 59% more (GBP170 to £270), and tax on a Citroen Xsara Picasso will rise by 48% to GBP310.
The paper added that, from 2010, there will also be a higher first-year rate – described as a showroom tax – for new cars. This will be levied on all cars emitting more than 130g of CO2 when they are bought and varies from GBP115 to GBP950.
Edmund King, the president of the Automobile Association told the Daily Telegraph motorists would be “shocked” when they had to pay the higher levels of vehicle duty for virtually no environmental benefit.
“If the projected results of the move would be to significantly reduce carbon dioxide emissions, the motoring public would be more likely to accept it. But it just benefits Treasury coffers not the environment.”
A Treasury spokesman told the paper: “The government is committed to protecting the environment and tackling climate change. Part of this commitment involves promoting sustainable environmental improvements through tax and other economic instruments, and incentivising the development and uptake of lower emissions vehicles.”
The Daily Telegraph noted that the average price of a litre of diesel was a record 118.9p per litre on Wednesday, while unleaded (95-octane) petrol cost 109.1p.
