The UK government’s “green posturing” is driving up the tax burden for families, according to motor industry trade group the Society of Motor Manufacturers and Traders (SMMT).
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It said Labour chancellor (finance minister) Gordon Brown’s budget move “to out-green the Tories [the rival parliamentary Conservative party] and boost government coffers” has sent “road tax for higher emitting cars through the roof”.
The SMMT estimates a bonanza of GBP44.5m for the UK treasury over the next two years through changes to vehicle excise duty (VED) that will raise the annual charge for band G cars [determined by CO2 emissions] by 90%. That means all new cars emitting more than 225 g/km CO2, half of which are not SUVs or four-wheel drives.
“The chancellor and the green lobby may have convinced the public that this will affect rich drivers in central London,” said SMMT chief executive Christopher Macgowan. “The truth is that many thousands of people across the UK who rely on larger-engined vehicles, like families, farmers and small business people, face another hike in motoring bills in the years to come.”
The motor industry is not opposed to CO2-based taxation. In the last five years, strong signals on company car tax, vehicle excise duty and fuel tax (the lion’s share of annual motoring costs), have helped support manufacturers’ investment to bring lower carbon cars to market.
“We have called for stability, clarity and a long-term approach to CO2-based taxation,” said Macgowan. ‘What we heard [in the budget presented on Wednesday] was the opposite. This is gesture politics at its most cynical.”
In the UK, 176,141 new cars were sold in 2006 with emissions above the current band G rate, 225 g/km.
Of these 90,302 (51%) were SUVs or 4WD off-roaders.
Examples of the type of larger family cars that will also be hit by changes announced in the budget include the (Opel) Vauxhall Zafira people carrier [minivan] (2.0 litre petrol), Renault Espace people carrier (2.0 litre petrol), Peugeot 407 estate [wagpn] (2.2 litre petrol), Honda Accord estate (2.4 litre petrol) and Ford Mondeo estate (2.0 litre petrol).
