Millions could be worse off under road tax plans

Thursday, 10 July 2008 12:00 AM

Road tax increases could make millions worse off

Road tax increases could make millions worse off

Almost nine million motorists could well be £245 worse off 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?"

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.

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