'9m Worse Off' Under Car Tax Changes

Planned car tax overhaul will leave most out of pocket

By Oli S / Thursday, 10 July 2008 / Loading comments

Nine million car owners will be worse off under plans to overhaul the car tax system, it has been reported. Around half could be £245 worse off under the scheme and less than one in five will benefit, despite Government claims that there will be little impact on drivers.

The apparent contradiction came from Treasury minister Angela Eagle yesterday when she admitted to MPs that from April 2010 it will cost more to keep 43% of cars on the road – 9,423,450 vehicles. Around one million drivers of cars registered between 2001 and 2006 will reportedly see road tax increase from £210 to either £430 or £455 depending on emissions.

Other motorists face an increase of between £10 and £155. Just over 8million drivers will pay the same, while just 3,944,700 will see the price of a tax disc fall. The Government is already being heavily criticised over the road tax changes and Chancellor Alistair Darling has signaled that there may be a rethink.

Stephen Ladyman, a former Labour transport minister, said last night: 'I understand the desire to make changes to achieve green goals, but I don't believe that these measures will deliver a proportionate benefit compared to the pain they cause the people who will lose out.'

Shadow Chancellor George Osborne said: 'Gordon Brown appears to have misled Parliament. He said the majority of drivers would benefit from the changes to VED. Now even the Treasury has admitted that just a third of drivers will be better off in 2009, dropping to less than 20 per cent in 2010. This destroys the Government's defense that this is a green tax and in general gives green taxes a bad name.'

A Treasury spokesman said: 'Under the new bands of VED, the majority of motorists will be better or no worse off and for 25 of the 30 most popular models of cars, drivers will be better or no worse off.'