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'Gas guzzlers should pay £1,800 a year car tax'
By JANE MERRICK, Daily Mail
23:38pm 6th August 2006

Motorists who drive 'gas guzzling' vehicles should pay a staggering £1,800 a year in car tax, according to a committee of MPs.

The controversial step would see vehicle excise duty for 4x4s - already £210 a year - rocket by a massive eight times.

Even mid-range family cars like Ford Mondeos would face a £1,500 annual tax - while a Vauxhall Vectra would also be over £1,000.

A report by the cross-party Environmental Audit Committee claimed the move would encourage people to choose more environmentally friendly cars.

But even drivers of 'hybrid' cars which are part-run on electricity would see a seven-fold increase in tax, from £40 to £300.

The report, Reducing Carbon Emissions from Transport, also called for a lowering of the 70 mph speed limit.

Critics condemned the nine Labour, five Conservative and two LibDem MPs on the committee as 'out of touch'.

Their plan does not even recommend some sort of trade-off in return, such as lowering petrol duty.

The MPs endorsed a proposal by the Sustainable Development Commission, an environmental watchdog set up by Tony Blair, which suggested a £300 gap between each band.

The lowest Band A would be zero, as it is at present. But each band would rise dramatically by £300, with the top Band G rising dramatically to £1800 a year.

It would be a further blow to motorists, who are already being punished by rising fuel prices as a result of instability in the Middle East.

Although the suggestions were made by a committee of MPs, there are fears the proposals could be adopted by Government.

Vehicle excise duty currently raises around £5 billion for the taxman. But the committee's plans would rake in an estimated £5 billion extra for the Treasury.

MPs said Gordon Brown deserved praise for scrapping vehicle excise duty on the cars with minimum carbon dioxide emissions in this year's Budget.

But it added: 'Reforms to vehicle excise duty, however, have been much less impressive.

'Tax differentials between higher and lower carbon cars must be made much wider if they are to drive market transformation.'

Duty on cars in Band F, such as the Ford Mondeo, would rise from £190 to £1500, while tax on a Vauxhall Vectra, in Band E, would increase from £150 to £1200.

Band D tax, for a Vauxhall Astra, would soar from £125 to £900, while Band C, including the Renault Clio, would increase from £100 to £600.

Duty on the hybrid Toyota Prius, which runs on electricity and only switches to fuel at high speeds, which is classed as Band B, would increase from £40 to £300.

The Band A rate would remain at zero.

The committee's chairman, Conservative former minister Tim Yeo, admitted the plans were controversial.

Mr Yeo drives a BMW 5 series, which would be hit by the top £1800 tax rate. But he insisted he bought the car in 1996 and would buy a more environmentally friendly car when it needed replacing.

He added: 'The point of the report is to encourage people to make environmentally sensitive choices by giving them tax incentives to do so.

'Manufacturers would produce much greener cars and if the tax system encourages them to do so.'

But Paul Watters, head of roads and transport at the AA Motoring Trust, said: 'This report makes very difficult reading for motorists.

'It is out of touch on where the problems lie. We are already seeing record levels of fuel duty. To place a punitive tax on car ownership in this way will do nothing to help the environment.

'Some people may be encouraged to buy more environmentally friendly cars, but many families need larger cars to get around.

'The only thing this would do is raise billions more for the Treasury. The last thing we need are astronomical levels of VED, which is going to damage a lot of ordinary people's lives.'

If it applies to older cars then I face financial ruin. I wouldn't be able to sell them for anything if tax was suddenly £1800 each. That's £5400 for the 4 cars I own assuming they leave the classic car exemption in place. I only do about 6000 miles a year max anyway which is what is so damn galling.

Mr Ladyman said the government did not "rule out doing more in the future" on the tax levels.

But he was not sure that measure would deter people from buying gas guzzlers when they were already prepared to pay thousands of pounds for extra fuel.

He also argued that the speed limit should be based on safety and was not a cost effective way of tackling pollution.

MPs said Gordon Brown deserved praise for scrapping vehicle excise duty on the cars with minimum carbon dioxide emissions in this year's Budget.

Didn't it turn out that there are no cars currently available that fit in that band?

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VED Band: A CO2: Up to 100 Fuel: Diesel

Sorry, no manufacturers were found in the selected VED Band.

Search Results
VED Band: A CO2: Up to 100 Fuel: Petrol

Sorry, no manufacturers were found in the selected VED Band.

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VED Band: A CO2: Up to 100 Fuel: Alternative

Sorry, no manufacturers were found in the selected VED Band.

This badly thought out scheme also does not think about the implications for second hand car prices if it were introduced. Saying people could go buy a more efficient car may not be possible, prices of those in the lowest bands would sky rocket while those in the higher bands were plummet.