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Budget 2008: Higher tax for 9 in 10 drivers
By Robert Winnett, Deputy Political Editor
Last Updated: 2:21am GMT 14/03/2008

The full scale of the clampdown on middle-class motorists has become clear after it emerged that nine in 10 cars will be affected by higher rates of tax under plans announced in the Budget.

Analysis shows that over the next two years, millions of drivers will face soaring bills as road tax on some popular family models doubles.

However, duty on Rolls Royces and Porsches will rise by less than the typical family saloon - undermining claims that the taxes are meant for gas guzzlers.

The Treasury will net more than £1 billion from the tax grab - which includes a "showroom tax" of up to £950 - over the next three years.

The middle classes already face above-inflation increases on their energy bills, grocery shopping and mortgage costs.

Millions of people have little choice but to drive to work or school because of the poor state of public transport.

Pressure was building on Alistair Darling, the Chancellor, amid claims that the Treasury rushed through the new road tax system without studying the implications.

The president of the AA said that he had a meeting with the Treasury last week, at which point the new regime had not been drawn up.

Mr Darling is already struggling to restore his political reputation after having to undo hasty changes he proposed to capital gains tax and the taxation of non-domiciles.

A Labour insider admitted that of the two main Budget tax measures - alcohol and motoring - the assault on drivers could prove most damaging.

He said: "When you start clobbering families for driving a run-of-the-mill car or people carrier then people will start to notice and that could cause us difficulties."

The fact that the tax applies to people who may keep the same car for five years - not simply those with new models - has also been noted by senior Government figures.

The research, by the TaxPayers' Alliance (TPA), shows that tax on 88 per cent of models will rise and only nine per cent of vehicles will benefit from the new system. Popular family cars are the biggest losers.

Mr Darling is accused of misleading motorists, as he said the changes were ostensibly to target "gas-guzzlers".

The Budget states: "As a result of these reforms, the majority of motorists will be better or no worse off in 2009." But the analysis shows family car drivers suffer more than those with luxury vehicles.

For example, the tax on a Vauxhall Astra 2.0i 16v or Saab 9-3 MY2008 will more than double from £210 to £430. The owner of a Ford Focus 1.6 Duratec will pay 59 per cent more (£170 to £270), and tax on a Citroen Xsara Picasso will rise by 48 per cent to £310.

In contrast, over the past five years the duty on these vehicles rose only 30 per cent. Even drivers of Nissan Micras face a 24 per cent rise - from £145 to £180 - compared to 16 per cent over the past five years. But the tax on a Rolls-Royce Phantom, a Hummer H3 or Porsche Cayenne GTS will rise by only 13.75 per cent, from £400 to £455.

Matthew Elliott, of the TPA, said: "This was dressed up as a measure to only punish extravagant cars, but it will hit the great majority of models.

"Alistair Darling may have claimed high moral motives, but this is just a grubby tax grab that will hit millions of ordinary families."

Cars will be divided into 13 groups for road tax purposes depending on their CO2 emissions. Annual road tax will then be charged at up to £440 for cars such as Jaguars, Range Rovers and even some people carriers, emitting more than 255g of CO2 per kilometre.

Cars producing less than 100g will not be taxed.

At present, there are seven bands, with the least green vehicles paying £400. Some family cars will move up several bands.

From 2010, there will also be a higher first year rate - showroom tax - for new cars. This will be levied on all cars emitting more than 130g of CO2 and varies from £115 to £950.

Models attracting the £950 charge include Volkswagen Touaregs, Audi A6 and A8s and Volvo V70s. Those in the next band - paying £750 - include Vauxhall Vectras, Mercedes M and E class estates, and Mitsubishi Shoguns.

Edmund King, of the AA, said the changes were rushed through and affected more vehicles than intended.

"We had a meeting with Angela Eagle [a Treasury minister] just 10 days ago and they appeared to have only started to think about it. They rushed into this without thinking through the implications - it's a bit of a cock-up."

Motoring groups said the increases would dent the second-hand value of large family cars, 4x4s and sports cars and companies are expected to sell thousands of fleet cars.

However, cars made before 2001 are excluded from the banding system and owners will pay a flat rate of £200, which will rise with inflation.

A Treasury spokesman said: "As a result of the changes, next year the majority of motorists will be no worse off. The third of people who drive the cleanest cars will be better off.

"The Budget announced changes to cut carbon emissions across the board, and encouraging people to buy cleaner cars is an important part of that."

The Treasury said the TPA numbers were based on total models in production and did not reflect what people actually drove.

However, cars made before 2001 are excluded from the banding system and owners will pay a flat rate of £200, which will rise with inflation.

So in addition to not being able to afford a family home, a working class family are denied a half decent family car as well now?

There are a lot of eminent red faces wandering the halls of universities around the world, wondering where the next research grant is coming from as 'Erectile Dysfunction In Northern European Dormice With Reference To Climate Change' ain't going to net them diddly-squat soon, let alone the ten mil they need for that new gene-splicer thingy.

This government detests the individual and the freedoms of the individual. They use taxation and fines in place of workable legislation and invent useless laws and proclamations at such a rate that we are all now criminals waiting to be caught.

Sadly, it is not JUST this government, bit our other parties also suffer from illusion that the solution to all life's problems is regulation...

Budget 2008: Families to suffer as Budget threatens the value of larger cars
By Harry Wallop, Consumer Affairs Correspondent
Last Updated: 2:42am GMT 15/03/2008

Families who sell their cars on the second-hand market face significant losses as a result of changes to road tax introduced by Alistair Darling in this week's Budget.

The value of many larger cars, essential for families with children, could fall substantially because of their higher running costs, experts said. This would leave many owners considerably out of pocket. Three out of every four cars sold in Britain are sold on the second-hand market.

The changes to the vehicle excise duty were announced by the Chancellor "to encourage manufacturers to produce cleaner cars".

However, the changes in duty affect all cars, new and old. A Vauxhall Zafira made in 2001, for instance, and specifically marketed at families, will see its annual duty increase by £100 to £310.

A Ford Mondeo 2.0i 16v estate, will also see its duty increase by £100 to £310 a year.

The motoring group AA said owners would be hit doubly hard. Not only would their running costs increase, but their sale values would fall.

Edmund King, the AA president, said some larger cars "could fall in value by 15 per cent". He said: "Certain models will become hard to sell. There will be tens of thousands of families that need a large car to fit three car seats.

"They have low mileage and keep it for five or six years - that's good for the environment. Now they will be hit not only by a 50 per cent increase in road tax, they will also find their car worth far less."

Many owners of larger cars expressed their horror as the full implications of the changes to the tax regime started to emerge. The Daily Telegraph told yesterday how nine out of 10 drivers faced higher vehicle excise duty.

Mark Osland, an independent financial adviser from Surrey, owns a second-hand 2001 Land Rover Discovery - big enough for his three children, a dog and the sports euipment his family uses.

"This was sold in the Budget as a tax on new cars. It is not at all. It is a retrospective tax," he said.

"I have no problem with taxes going up on the forecourt. If you are buying a car you can make a choice. But it is disgraceful that my tax is going up from £310 to £410, even though I bought this car 18 months ago.

"I am sure this is going to affect my resale value. I had hoped to sell it this year for about £6,500."

A leading car research company, Glass's, which values second-hand cars, said values of vehicles had yet to start falling.

Adrian Rushmore, the managing editor of the company, said: "The rising cost of motoring is becoming a very big issue.

"The cumulative effect of higher fuel prices and higher vehicle excise duty will dissuade people from buying bigger-engined cars. And that will cause prices to fall."

A Treasury spokesman said: "As a result of the changes, next year the majority of motorists will be no worse off.

Sadly, it is not JUST this government, bit our other parties also suffer from illusion that the solution to all life's problems is regulation...

The tide is turning on the 'climate change' issue. More and more proper science is being published that either debunks the pseudoscience of the tree-huggers or provides evidence to show that we are not in some sort of environmental meltdown.

There are a lot of eminent red faces wandering the halls of universities around the world, wondering where the next research grant is coming from as 'Erectile Dysfunction In Northern European Dormice With Reference To Climate Change' ain't going to net them diddly-squat soon, let alone the ten mil they need for that new gene-splicer thingy.

Taxing us for our own good is soon to be a thing of the past and Eyebrow Boy is doing some last-minute extra-hard tit pulling on the cash-cow. Fuel will rattle up in price as they try go rake in as much as they can before the bubble bursts.

I seem to remember, some time ago, a brilliant suggestion of organising a week in which everybody uses public transport for every journey they make - the estimate was that, by Thursday, people from Tuesday would still be trying to get home...

This government detests the individual and the freedoms of the individual.

This assault on public freedom has led to the slowly rising tide of Englishmen, Scotsmen, Welshmen and Irishmen abandoning their homelands for pastures new in an escape from the neo-fascist oppression we now live under.

Having said that, if Labour win the next election I am gone. Simple as that.

Budget 2008: Families to suffer as Budget threatens the value of larger cars
By Harry Wallop, Consumer Affairs Correspondent
Last Updated: 2:42am GMT 15/03/2008

Families who sell their cars on the second-hand market face significant losses as a result of changes to road tax introduced by Alistair Darling in this week's Budget.