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UK raises tax on least-efficient cars |
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Car taxes for drivers of the most polluting vehicles will almost double to £400 by April 2008, according to the UK Budget 2007 introduced by Chancellor Gordon Brown.
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2007-03-22
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The announced changes will raise the Vehicle Excise Duty (VED) – often known as the UK road tax – to £300 in the fiscal year 2007-08 and to £400 in 2008-09 for the least fuel-efficient cars. Vehicles classified as Band G that emit 226 g/km CO2 or more will see the highest increase, while owners of Band F, E and C vehicles emitting less will face a rise of £10 and £5 per year respectively.
The rise is accompanied by a 30% cut in the annual car tax for some of the least emissive cars. While the least polluting Band A will continue to pay no VED, drivers of the next cleanest Band B will see their rate cut to £35 from £50 for diesel and £40 for petrol cars.
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Other efficiency related initiatives in the UK Budget 2007 include:
- An increase of 2 pence per liter in fuel duty rates from October this year, with an increase of 2 and 1.84 pence in the next two years
- A review to examine the vehicle technologies which over the next 25 years could help to "decarbonise" road transport and foster energy saving potential of innovation in this area
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Positions
"Transport accounts for a quarter of emissions. We want Britain to lead in developing the next generation of low and no carbon vehicles," said Brown while introducing the Budget 2007.
While the RAC Foundation – an independent charity promoting sustainable transport - welcomed the measures as a "great incentive to help motorists choose the most environmentally friendly model suitable for their needs," critics blamed Brown of not doing enough to confront climate change.
"The Chancellor should have done more to make it easier and cheaper for people to go green. [...] Now is the time for bold leadership, not half measures in the face of overwhelming threat," criticised the environmental NGO Friends of the Earth the rather low changes for some car bands.
Background
In 1998, the Vehicle Excise Duty was introduced in the UK to promote the purchase of low-emissive vehicles. In 2001, the VED was reformed to introduce graduated carbon dioxide bands. Since then, the annual tax on the use of motor vehicles on public roads has been charged according to the vehicle's level of carbon dioxide emissions, replacing the engine capacity as a main criteria.
Brown's budget comes a week after the government issued its Climate Change Bill calling for a mandatory cut of 60% of national emissions by 2050.
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More information:
 Budget 2007 – Chapter 7 (see pages 20 et sqq.) (272 KB)
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