More misery is being predicted for hard-pressed motorists, write Colene McKessick and Morag Lindsay, as the scale of the Treasury’s road tax reforms is revealed

Taxing times

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CONTROVERSIAL: The government has revealed its vehicle excise duty reforms – to the delight and misery of motorists

Athol Strachan: ‘proposals are “ill-thought-out

Pity the poor motorist. As if rising prices at the petrol pumps weren’t enough to cope with, around 9million of them now face soaring costs for road tax as the UK Government finally reveals the winners and losers in its vehicle excise duty reforms.

Around 44% of motorists will pay more when the new regime – targeting cars which produce the highest levels of harmful COemissions – is introduced next year.

The increases come as no surprise to north-east motorist Anthony Yule, who runs a Honda CRV 2.2l diesel, a Renault Clio Sport and a new VW Golf Blue Motion.

Greenest of them all is the Golf, which qualifies for the new band B, making it very cheap to run.

Despite its bulk, the CRV emits less COthan the Clio, but both will see their road tax costs rise.

“It’s a fact of life that owning a car is getting more expensive,” said Mr Yule.

As he has found, it’s not just the owners of gas-guzzling 4x4s who will be hit by the new charges. The increases are also going to hit many ordinary motorists driving middle-of-the-range cars.

From 2009–10, the reforms will cost drivers of popular cars like the Vauxhall Vectra an extra £90 a year – a 43% increase in their road tax.

A tax disc for a VW Passat is going up £50 to £260 – a 24% rise. For a Renault Megane the cost is going up £30 to £175 – an increase of 21%.

And because the changes will apply to cars registered from 2001 onwards, the owners of some older cars will be hit disproportionately hard.

A 2001 Volkswagen Golf with a second-hand value of £2,400 will cost £260 to tax under the new system – 11% of what the car is worth.

For cars manufactured before 2001, road tax will continue to be measured according to engine size.

The rises are coming about as a result of a shake-up of the payment bands currently in place. For cars registered on or after March 1, 2001, the seven existing bands, based on fuel type and COemission levels, will rise to 13 bands from 2009.

Cars emitting 150g or less per kilometre will pay less. These range from band A models, such as the VW Polo Bluemotion 1.4 Tdi, to those in band F, such as the Vauxhall Astra 1.4 16V. Owners of cars like the Skoda Fabia Estate Greenline, Mazda 2 1.4, Kia Picanto 1.1 and Renault Clio 1.2 Quickshift should also be better off.

At the other end of the scale, a new top band (band M) is being introduced for cars emitting more than 225g of carbon dioxide per kilometre. These cars will pay an increased rate of £425.

In addition, from 2010/11, the most-polluting new cars will pay a first-year rate of £950, while new cars with emission levels of 130g/km or less will pay nothing at all.

Official figures predict that 8.7million vehicles will see their tax increase in 2009/10 – all in the six most-polluting bands.

Typical casualties will be the Citroen C5 2.2 Hdi Estate, Ford Mondeo 1.6 Estate, Saab 9-3 Estate, Peugeot 407 saloon 2.0 Auto, Peugeot 807 2.0 Auto and Land Rover Sport Auto 3.6 TDV8.

Disclosing the figures, Treasury Minister Angela Eagle conceded that five of the UK’s 30 most popular cars would cost more to tax under the changes.

These are the 2.2-litre diesel Land Rover Freelander, the 1.6 unleaded Toyota Auris, the 2.2 diesel Honda CR-V, the 1.8 unleaded Vauxhall Vectra and the 1.6 unleaded Vauxhall Zafira.

She also insisted a third of motorists would be better off, but it is the tax increases that have attracted condemnation from motoring groups.

Sheila Rainger of the RAC said: “Drivers of very modest cars will be hit by increases, which, added to soaring fuel prices, will plunge family budgets into the red.”

AA president Edmund King said: “Coupled with the record pump prices, this will bring double misery to millions of motorists.”

Ashton Berkhauer, insurance expert at uSwitch.com, agreed the measures would come as a blow on top of the rising costs of fuel and insurance.

“Motorists are being forced to think carefully about when, where or even if they use their cars,” he said. “Those in rural communities, the elderly, the disabled and lower-income families will really suffer.”

He also predicted lean times ahead for car dealers.

“We have already seen new car sales fall by 6.1% in the past year. It will be interesting to see what further effects these spiralling costs will have on the forecourts,” he added.

At Town and County Motors, in Aberdeen, managing director Athol Strachan said customers were still interested in new cars but were becoming increasingly confused about the best way to protect the planet, with biofuels pushing up food prices and problems with hydrogen technology and hybrid motors.

He condemned the proposals as an “ill-thought-out, ill-founded stealth tax that will affect the people who can least afford to pay”, and predicted another U-turn from Prime Minister Gordon Brown when he realises how big a vote loser the rises are likely to be for Labour.

But Duncan McLaren, chief executive of Friends of the Earth Scotland, said the government had to “stand firm” on its proposals and do more to encourage greener travel – such as backing tough fuel efficiency standards for new vehicles and investing in alternatives to the car. He said: “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.”

Almuth Ernsting, of the Aberdeen Campaign against Climate Change, urged people not to lose sight of the reason for the road tax reforms.

“It’s absolutely right that measures are taken against high-polluting cars,” she said. “But it’s also important that the money should be ring-fenced and put into things like cycle paths, public transport and policies for pedestrians. What would really make a difference is action at EU level to introduce strict efficiency standards for car manufacturers and prevent them from making these fuel-inefficient cars.”

Back at Anthony Yule’s garage in Aberdeenshire, the lifelong motoring enthusiast is philosophical about what the changes will mean.

“I don’t think it will turn people off of their cars,” he said. “Yes, my Lotus sports car will cost more to run, and I might run it less, but it doesn’t mean I’ll stop using it. Hopefully we’ll still be able to enjoy motoring.”