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Last Updated: Friday, 19 May 2006, 13:16 GMT 14:16 UK
Lib Dems plan a 2,000 road tax
A traffic jam on London's Euston Road
The Liberal Democrats hope to change Britain's car-buying habits
The owners of cars which generate the most pollution would face annual road taxes of 2,000 under Liberal Democrat plans to tackle climate change.

The figure - 10 times the current rate - would cover high-end cars such as BMW's 7 series, Bentley Continentals but also some people carriers.

It would apply only to new cars, with exemptions for "essential" vehicles.

Airlines would also be taxed per flight rather than by passenger, to penalise companies operating half-full planes.

The party's environmental spokesman Chris Huhne said it was vital "to use green taxes as a lever in order to make our behaviour sustainable".

He said he wanted to "change the cars that we buy rather than the cars that we're using at the moment".

This was because it was important "people know exactly what they're letting themselves in for" when considering a purchase.

Mr Huhne insisted the increase would not lead to motorists retaining dilapidated cars instead of replacing them.

"The idea is not to encourage people to go on driving 'rust-buckets' but actually to encourage them when they're purchasing a new car to buy a car which is consistent with their environmental obligations," he said.

Current tax levels

Vehicles producing the greatest pollution - carbon dioxide emissions of 225 grams per kilometre or above - are currently taxed at 215 per year if they run on diesel fuel.

The 2006 Porsche Cayenne
The Porsche Cayenne is one car which falls into the top tax bracket
Petrol-fuelled vehicles currently face excise duty of 210. The annual charge is 200 for those powered by alternative methods of energy.

At the other end of the scale, owners of vehicles with emissions of fewer than 100 grams per kilometre are exempt from vehicle excise duty.

The Liberal Democrats' proposals state the 2,000 tax would apply to nearly 200,000 cars in the so-called 'Band G' - 8% of all new vehicles sold in Britain each year.

They were unable to provide any proposed figures for other bands, saying it was too early do so at this stage.

Impact on airlines

Mr Huhne also insisted air fares would not rise as a direct result of the party's proposal to replace air passenger duty with a single tax per journey.

"Airlines would reconsider how many flights they wanted during a day to a particular destination," he said.

However, the party's Treasury spokesman, Vince Cable, conceded that "people who travel in half-empty aircraft might well pay more than they do at the moment".

This was because it was "up to the airlines to decide how they pass on the charge that they would pay", he said.

Holistic approach

For the Conservatives, shadow environment secretary Peter Ainsworth said the Lib Dems' proposals were not the only solution to climate change.

"Fuel duty is a clear example of where tax has not helped cut emissions, because consumers have not been given incentives and alternatives to move away from driving," he said.

"If we are to tackle climate change, we need a holistic package of mutually reinforcing measures, not one micro-managing tax after another."

Mr Huhne said any revenue raised from these green taxes would "go back to people in tax cuts elsewhere, particularly income tax cuts".

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