The Government puts the boot in

July 11th, 2008

Government ministers have finally admitted what many people have feared for months, the planned road tax increases aimed at punishing drivers of the most polluting cars will leave 9.4 million road users paying more tax.

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% of vehicles.

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

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

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.

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”. In addition to this people taking out guaranteed car finance have found rates increasing.

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.

Among ideas being considered to help those worse off by the tax changes are help to trade in older, high-polluting cars, and a longer transition period in which to sell them.

From a macro-economic perspective in the long term green taxes are in fact a good thing because they correct the market failure and minimise pollution. However, this has short term significance as well at a time when the economy is faltering and people are feeling the pinch or rising prices.

For the Government to be pushing ahead with a measure that will increase the costs of motoring at a time of the world oil price surging and inflation emerging shows a complete lack of political understanding but, more importantly, it shows that the Government is totally out of touch with the lives of the people of this country.

Don’t forget, ministers do not pay the road tax for the limousines, and they do not have to fill the tank either.

This entry was posted on Friday, July 11th, 2008 at 11:41 am and is filed under Personal Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

The Government puts the boot in

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