Page last updated at 22:02 GMT, Thursday, 10 July 2008 23:02 UK

Road tax increase 'will hit 9.4m'

Car tax disc
Labour backbenchers have criticised the reforms to the road tax system

An estimated 9.4 million motorists will have to pay more road tax in 2010-11 under reforms aimed at punishing "gas-guzzling" vehicles, ministers admit.

Official estimates say vehicle excise duty will rise for 43% of vehicles made since 2001 - by up to 245 for the most polluting ones - but will fall for 18%.

The Tories have accused Gordon Brown of misleading Parliament by saying "the majority of drivers will benefit".

Mr Brown brushed off the claim and said the aim was to cut carbon emissions.

The government figures for 2010-11 show that only about a fifth of drivers will be better off, while four-fifths will either pay more car tax or the same.

'No worse off'

Conservative leader David Cameron called on Mr Brown to "correct himself and apologise".

But Downing Street pointed out that Mr Brown had told MPs at question time on 14 May that "the majority of motorists will benefit or pay no more in vehicle excise duty as a result".

IMPACT ON MOST POPULAR CARS

Car* Tax change**
Ford Fiesta 1.2 P Zetec Climate 0
BMW 3 Series 2.0 D 320D SE +18
Ford Focus 1.6 P Zetec Climate +5
Vauxhall Zafira 1.6 P Life E4 +35
Land Rover Freelander 2.2 D TD4 GS +60

That was the position the government had repeatedly set out and was confirmed by the Treasury figures, Mr Brown's spokesman added.

The estimates, which were revealed for the first time in a Parliamentary answer by Treasury minister Angela Eagle, have reignited the row over road tax changes, which have attracted criticism from a number of Labour MPs.

Ms Eagle said experts believed that in 2009-10, "a third of cars will be better off in real terms, and in total, approximately 55% of cars will be no worse off".

However, it is believed that a little more than 44% - 8.7 million vehicles, all in the six top-polluting bands - will pay more, she added.

For 2010-11, 18% (3.9 million people) will pay less tax, 39% (8.5 million) will see no difference and 43% (9.4 million) will be worse off.

It is calculated that the Exchequer will receive more than 1 billion in additional revenue from the scheme by 2011.

'Bad name'

Ms Eagle also admitted that five of the UK's 30 most popular cars would pay more - the 2.2l diesel Land Rover Freelander, the 1.6l unleaded Toyota Auris, the 2.2l diesel Honda CR-V, the 1.8l unleaded Vauxhall Vectra and the 1.6l unleaded Vauxhall Zafira.

Shadow Chancellor George Osborne seized on Mr Brown's earlier statement that the majority of drivers would benefit saying: "This destroys the government's defence that this is a green tax and in general gives green taxes a bad name. "

Treasury Minister Angela Eagle

Later in the Commons he added: "Everyone knows the government is sleepwalking into another 10p tax fiasco."

Environmental groups have urged the government to "stand firm" on plans to raise excise duty.

Friends of the Earth has also called on ministers to invest the money raised in better public transport, which it said was a "greener" alternative to the car.

Core vote

AA president Edmund King said the changes were "politically dangerous" with high petrol prices already pushing up the cost of motoring and said the new figures confirmed its "worst fears".

Nearly 50 Labour backbenchers had signed an amendment to the Finance Bill asking the government to rethink its plans for car tax, but the government managed to avert a rebellion in the Commons.

IMPACT ON ALL CARS

How many cars in each tax band will pay less, same or more tax?

Band C02 (g/km) Paying less tax Paying same tax Paying more tax
A Up to 100 - 100% -
B 101-110 100% - -
C 111-120 20% 80% -
D 121-130 100% - -
E 131-140 100% - -
F 141-150 - 100% -
G 151-160 - 100% -
H 161-170 - 40% 60%
I 171-180 - - 100%
J 181-200 - - 100%
K 201-225 - - 100%
L 226-255 - - 100%
M Over 255 - - 100%
All bands 18% 39% 43%

Chancellor Alistair Darling was reported to have promised the rebels that there would be moves this autumn to ease the transition.

One of the Labour rebels, Ronnie Campbell, told BBC Radio 4's The World at One: "I think we have got a commitment from Alistair [Darling] to look at it in the Pre-Budget [report] in October."

He said backbenchers were "flexing our muscles" and saying "Come on, be careful here. You're going to tax these people, they're working class people, they're our core vote".

Later Ms Eagle said the legislation had not yet gone before the House of Commons and while the government had set the "context and the policy aims that we wish to pursue" it would be "churlish in the extreme not to listen" to people's concerns.

The BBC's chief political correspondent James Landale said among ideas being considered were help to trade in older, high-polluting cars, and a longer transition period in which to sell them.

The Liberal Democrats' transport spokesman, Norman Baker, said the government "must have a death wish" by introducing taxes which were "penalising" people for having cars they may have chosen several years ago.

"Eventually we should cut car taxes and introduce road charges on a pay-as-you-go basis that will not penalise those with no option but to drive," Mr Baker added.


SEE ALSO
Bill passes after rethink on duty
02 Jul 08 |  UK Politics
Why are there rebels everywhere?
08 Jun 08 |  UK Politics
Green car tax a global trend - PM
05 Jun 08 |  UK Politics
Brown attacked over road tax plan
04 Jun 08 |  UK Politics
Budget car tax rise 'not hidden'
30 Apr 08 |  UK Politics

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