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Road tax increase 'will hit 9m' Road tax increase 'will hit 9m'
(about 1 hour later)
An estimated nine million motorists will have to pay more road tax under reforms aimed at punishing gas-guzzling vehicles, the government has admitted.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%.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 confirmed "our worst fears", while the Tories said the PM had misled Parliament over the plan.The AA said the figures confirmed "our worst fears", while the Tories said the PM had misled Parliament over the plan.
But ministers insisted the aim was to cut pollution, not to raise revenue. No 10 rejected that suggestion and said the aim was to cut carbon emissions.
Environmental groups have urged the government to "stand firm" on plans to raise excise duty.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.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.
'Bad name''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 estimates, which were revealed for the first time in a Parliamentary answer by Treasury minister Angela Eagle, have reignited the row over road tax changes, which have attracted criticism from a number of Labour MPs.
ROAD TAX RATES 2009-10 Figures refer to CO2 emissions in grammes per kilometre Paying less: 101 to 150Paying the same: 0 to 100, 151 to 160, 161 to 170 (half of drivers)Paying more: 161 to 170 (half of drivers), 171 and above Source: Treasury What the emissions figures mean ROAD TAX RATES 2009-10 Figures refer to CO2 emissions in gram per kilometre Paying less: 101 to 150Paying the same: 0 to 100, 151 to 160, 161 to 170 (half of drivers)Paying more: 161 to 170 (half of drivers), 171 and above Source: Treasury What the emissions figures mean
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 experts believed 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".Ms Eagle said experts believed 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 a little more than 44% - 8.7 million vehicles, all in the six top-polluting bands - will pay more, she added.However, it is believed that a little more than 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.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.
ROAD TAX RATES 2010-11 Figures refer to CO2 emissions in grammes per kilometre Paying less: 101 to 110, 111 to 120 (20% of drivers), 121 to 140Paying the same: 0 to 100, 111 to 120 (80% of drivers), 141 to 160, 161 to 170 (40% of drivers)Paying more: 161 to 170 (60% of drivers), 171 and above Source: TreasuryROAD TAX RATES 2010-11 Figures refer to CO2 emissions in grammes per kilometre Paying less: 101 to 110, 111 to 120 (20% of drivers), 121 to 140Paying the same: 0 to 100, 111 to 120 (80% of drivers), 141 to 160, 161 to 170 (40% of drivers)Paying more: 161 to 170 (60% of drivers), 171 and above Source: Treasury
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.
At Treasury questions in the Commons on Thursday, minister Jane Kennedy added: "Clearly low-income families who have motor vehicles will be among those that are affected."
She was unable to say how many households this would affect, however.
Shadow Chancellor George Osborne seized on Gordon Brown's earlier claims that the majority of drivers would benefit from the reforms.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.Mr Osborne said: "This destroys the government's defence that this is a green tax and in general gives green taxes a bad name.
Everyone knows the government is sleepwalking into another 10p tax fiasco George OsborneShadow chancellor
"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?""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?"
Later in the Commons he called for Mr Brown to "apologise to the House".
"Everyone knows the government is sleepwalking into another 10p tax fiasco," he added.
However Downing Street pointed out that Mr Brown had told MPs at question time on 14 May that "the majority of motorists will benefit or pay no more in vehicle excise duty as a result".
That was the position the government had repeatedly set out and was confirmed by the Treasury figures, Mr Brown's spokesman added.
AA President Edmund King said the changes were "politically dangerous", with high petrol prices already pushing up the cost of motoring.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 cashRaise 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. Chancellor Alistair Darling was reported to have promised Labour rebels when the changes were dicsussed in 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."
I don't think we have heard anything from people who benefit from the changes Angela Eagle MPTreasury ministerI don't think we have heard anything from people who benefit from the changes Angela Eagle MPTreasury minister
However, giving evidence to the Environmental Audit Committee, Ms Eagle distanced herself from hints from Justice Secretary Jack Straw that the government could backtrack, 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 - a move supported by Friends of the Earth.But she hinted that drivers could be offered cash to scrap older high-polluting vehicles rather than selling them on - a move supported by Friends of the Earth.
Shadow Treasury minister Justine Greening said people saw changes to road tax as "stealth" charges - "a mechanism to get money out of their pockets".Shadow Treasury minister Justine Greening said people saw changes to road tax as "stealth" charges - "a mechanism to get money out of their pockets".
"It's all about saving this government's finances because they've, frankly, run out of money," she said."It's all about saving this government's finances because they've, frankly, run out of money," she said.
But Ms Eagle denied the Treasury was simply trying to raise cash.But Ms Eagle denied the Treasury was simply trying to raise cash.
Eventually we should cut car taxes and introduce road charges on a pay-as-you-go basis Norman BakerLib Dem transport spokesman
Addressing the committee, she said: "I would just say that there are much simpler, easier ways of raising revenue if we were interested in doing that.Addressing the committee, 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. I don't think we have heard anything from people who benefit from the changes.""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."
The Liberal Democrats' transport spokesman, Norman Baker, said the government "must have a death wish" by introducing taxes which were "penalising" people for having cars they may have chosen several years ago.
"Eventually we should cut car taxes and introduce road charges on a pay-as-you-go basis that will not penalise those with no option but to drive," Mr Baker added.