UK chancellor (finance minister) Gordon Brown today hiked vehicle excise duty (or VED, popularly referred to as ‘road tax’) on the most polluting vehicles from GBP165-170 a year at present to GBP210 annually in his 2006 budget on Wednesday afternoon.
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But Brown softened the blow by introducing a zero rate for the first time, though it applies only to a small number of cars with the lowest carbon dioxide emissions.
VED, based on CO2 emissions, will then rise in increments of GBP40, GBP100, GBP125, GBP150 and GBP190, with the GBP210 a new top ‘band’ for the worst polluters, Sky News reported.
Presenting his budget in parliament, Brown claimed that three million UK motorists would now pay a reduced rate of GBP100 and the duty paid to keep 50% of cars legally on the road would be frozen or reduced from Thursday.
Brown, who has repeatedly been criticised for the amount of tax he takes on every litre of petrol and diesel, also announced that ‘clean’ fuel would henceforth be 35 pence cheaper.
He also froze any future fuel duty (tax) increases until 1 September. Fuel duty has in the past been increased in line with inflation plus a percentage but that a few years ago led to lorry drivers’ protests and blockades that brought the country to a halt.
Consumers, hit recently by huge rises in domestic gas and electricity prices, would not take kindly to another rise in a fuel tax already regarded as punitive and it’s clear the chancellor has considered that when setting his latest budget.
Graeme Roberts
