Road tax increase ‘will hit 9m’

An estimated nine million motorists will have to pay more road tax under reforms aimed at punishing gas-guzzling vehicles, the government has admitted.

Official estimates say vehicle excise duty will rise for 44% of vehicles made since 2001 – by up to £245 for the most polluting ones – but will fall for 33%.

The AA said the figures “confirm our worst fears”, while the Tories said the PM had misled parliament over the plan.

But ministers insist the aim is to cut pollution, not raise revenue.

‘Bad name’

The estimates, which were revealed for the first time in a parliamentary answer by Treasury minister Angela Eagle, are likely to reignite the row over road tax changes, which have attracted fierce criticism from Labour MPs.

The government has already had to offer concessions to its backbenchers after criticism that poorer motorists will be hit harder by the decision to apply the new rates to all cars registered since 2001.

Ms Eagle said that experts believe 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 just over 44% – 8.7 million vehicles, all in the six top-polluting bands – will pay more, she added.

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

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 Gordon Brown’s earlier claims that the majority of drivers would benefit from the reforms.

Mr Osborne said: “This destroys the government’s defence that this is a green tax and in general gives green taxes a bad name.”

“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?”

AA President Edmund King said the changes were “politically dangerous” with high petrol prices already pushing up the cost of motoring.

“This is not a green tax but a mean tax that will hit millions of hard-up families,” he said.

Raise cash

Chancellor Alistair Darling promised Labour rebels when the changes were passed by parliament that there would be moves this autumn to ease the transition.

However, giving evidence to the Environmental Audit Committee, Ms Eagle distanced herself from hints from Justice Secretary Jack Straw that the government could backtrack on the road reforms, insisting: “We have set out our stall on the direction of policy.”

But she hinted that drivers could be offered cash to scrap older high-polluting vehicles rather than selling them on.

Addressing the committee, Ms Eagle denied the Treasury was simply trying to raise cash.

She said: “I would just say that there are much simpler, easier ways of raising revenue if we were interested in doing that.

“I think that we have heard a lot from people who are worried about the changes.

Ms Eagle added: “I don’t think we have heard anything from people who benefit from the changes.