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Higher Bills For Motorists

More than nine million motorists face higher tax bills

Gordon Brown has been accused of misleading MPs after the Government admitted that more than nine million motorists would lose out under controversial road tax reforms.

Figures released last night show that only 33 per cent of cars will be taxed at a lower rate after the introduction of a new sliding scale designed to hit the most polluting vehicles.

As a result of the changes, 9.4 million motorists face higher bills by 2010-11, 43% of the predicted number of vehicles on the road. Some 8.4m will lay out around the same as at present, while only 1.4m are set to benefit financially.

Experts calculate that the Exchequer will have received more than a billion in extra revenue by 2011.

The figures, in a parliamentary answer, are a dramatic increase on previous Treasury estimates about the losers under the scheme, which affects vehicles up to seven years old. Alistair Darling, the Chancellor, only avoided a Commons rebellion last week after assuring Labour MPs that he was prepared to look again at the issue.

The Tories accused the Prime Minister of misleading parliament by claiming last month that most drivers would be better off. Motoring organisations also expressed outrage at the changes, claiming drivers hit by soaring fuel costs would face more misery.

George Osborne, the Shadow Chancellor, said: "Gordon Brown appears to have misled Parliament. He said that the majority of drivers would benefit from the changes to VED. Now even the Treasury have admitted that just a third of drivers will be better off in 2009, dropping to less than 20 per cent in 2010."

Edmund King, the AA President, said hammering so many motorists would be "politically dangerous" for Mr Brown with a general election looming. "This is not a green tax but a mean tax that will hit millions of hard-up families," he said.

Sheila Rainger, of the RAC, said: "It is shocking that the Treasury has taken so long to acknowledge the full impact of these budget changes.

"Far from being a green tax, this scheme will take £1.2 billion off the motorist and put it in the Treasury’s coffers. The Chancellor must think again."

However, giving evidence to the Environmental Audit Committee shortly before the new details were released, Treasury Minister Angela Eagle denied the Government was merely trying to raise revenue, insisting that reforms to road tax were never going to be popular, and suggesting those in for bigger bills were simply making more noise.

"I think that we have heard a lot from people who are worried about the changes. I don’t think we have heard anything from people who benefit from the changes," she said.

Mr Darling has been condemned for failing to mention the plans in his Budget speech in March, and putting them in the "small print" of the Red Book.

However, Ms Eagle insisted there had been no effort to hide the reforms. "It is a pretty bad stealth tax I would say, given all the publicity that is about," she said.

She refused to comment on hints from Justice Secretary Jack Straw that there could be a major climb-down on the road tax reforms, insisting only: "We have set out our stall on the direction of policy."

Currently, the maximum road tax for a vehicle registered between March 2001 and March 2006 is £210. However, from April 2010, in an attempt to hit the most polluting vehicles, that will increase to £455 for the heaviest polluters.

Vehicles such as Range Rovers and some people carriers emitting more than 255g of CO2 per kilometre will pay up to £440. Cars with smaller engines face a £100 rise.

Green groups welcomed moves to hit higher polluting vehicles, but said poorer people should be given financial help with new charges.

Simon Bullock, Friends of the Earth’s economics co-ordinator, said: “Three times more second hand cars are bought each year than new ones, so upping VED on old, very polluting cars will encourage people to choose greener vehicles, cut fuel bills and lower carbon dioxide emissions.

“But we do believe people should be given a helping hand. We are calling on ministers to help people switch to a cleaner vehicle by paying them to scrap their old gas-guzzlers and replace it with a greener car that uses less fuel.

“Ministers must stand firm on their VED plans and do more to encourage greener travel - such as backing tough fuel efficiency standards for new vehicles and investing in alternatives to the car such as rural public transport and faster, cheaper rail. This will also cut transport’s contribution to climate change.”

A Treasury spokesman said: "As we have consistently made clear, while more polluting vehicles will face higher charges, under the new bands of VED the majority of motorists will be better or no worse off."

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