‘Millions’ lose out on car tax
Up to nine million drivers will lose £245 under car tax plans, the Treasury has admitted.
Treasury minister Angela Eagle admitted to MPs yesterday that from April 2010 it will cost more to keep 43 per cent of all cars on the road – some 9,423,450 vehicles.
Only 3,944,700 cars out of the 22 million on the road – or 18 per cent – will see the price of a tax disc fall under the proposed rules to increase the cost of taxing the highest-polluting cars.
The remainder will see their tax unaffected by the changes. This seems to undermine Gordon Brown’s assertion last month that “the majority of drivers will benefit from it”.
Vehicles registered between March 2001 and March 2006 currently pay a maximum of £210 for a year’s road tax.
From April 2010, the maximum rate will increase by £245 to £455 for the most polluting cars.
George Osborne, the Conservative shadow chancellor said: “Gordon Brown appears to have misled parliament. He said that the majority of drivers would benefit from the changes to vehicle excise duty (VED).
“We need the prime minister to tell us whether he knew that he was giving parliament the wrong information and was treating the public like fools, or was it the case that he didn’t know the truth about the impact of his own Budget on families?”
And a green transport body, the Environmental Transport Association (ETA), said higher taxes will not be enough to persuade people to switch to electric or hybrid cars.
A spokesperson for the ETA said: “Many government ministers already have the use of a Toyota Prius hybrid car, but at almost £18,000 this type of car is out of reach for most people – high motoring taxes cannot cajole every British driver into an electric car if the market is not ready.”
If all drivers today switched from conventionally-powered vehicles to electric cars, the national grid would be unable to cope, the association added.
Friends of the Earth’s economics coordinator Simon Bullock said the government needed to help people make the switch to a green lifestyle.
“We believe people should be given a helping hand – we are calling on ministers to help people switch to a cleaner vehicle by paying them to scrap their old gas-guzzlers and replace it with a greener car that uses less fuel.”
The Liberal Democrats objected to the retrospective aspect of the tax.
“This government must have a death wish,” said transport spokesman Norman Baker.
“It is wrong in principle to tax behaviour retrospectively. Green taxes should be about influencing behaviour not penalising decisions made up to seven years ago.
“New green taxes must be offset by tax cuts elsewhere. The government has failed on both counts and is giving green taxes a bad name.”
The Scottish National party (SNP) said the car tax was another example of Labour hitting the worse well-off.
The party’s Treasury spokesman, Stewart Hosie, said: “Many of the same people who were hit with the doubling of the 10p tax rate are the same people about to be on the receiving end of Gordon Brown’s car tax changes.
“With food and fuel prices rising rapidly, and with the government failing to adopt a strategy to lower petrol and diesel prices, this change to vehicle excise duty is a slap in the face to hard-pressed families the length and breadth of Scotland.”
