MPs call for greater VED penalties for ‘gas-guzzlers’

MPs call for greater VED penalties for ‘gas-guzzlers’

Government plans to increase car tax for ‘gas-guzzling’ vehicles should be bolder to increase their environmental impact and encourage a greater switch to low-emission models

According to the influential House of Commons Environmental Audit Committee the rises in VED, which were announced in the March Budget and are due to come into effect in two phases - in April 2009 and April 2010 - as a ‘step in the right direction’.

But chairman Tim Yeo said the benefit to the environment would be limited, and called for more ambitious changes.

Meanwhile three committee members wrote a minority report calling the plan a retrospective tax because it put ‘a new tax on old cars’. They argued that its introduction should be put on hold until its impact was properly assessed.

The report has been published after months of pressure on Chancellor of the Exchequer Alistair Darling to scrap the changes. He has pledged to look at the measures again the Pre-Budget Report in the autumn.

Official estimates say VED will rise for 43% of vehicles made since 2001 - but will fall for 18%. The changes will increase the number of bands to 13, with the maximum tax for vehicles with the most emissions being £455 for 2010/11, while owners of the least polluting will pay zero.

The committee’s report, entitled ‘Vehicle Excise Duty as an Environmental Tax’, said the idea was a ‘step in the right direction’ and agreed it was not a retrospective tax.
But it did criticise some aspects of the changes, including the way they were presented in the small print of this year’s Budget.

Conservative MP Mr Yeo said the cost difference between the tax bands was not enough to make the public buy cleaner models.

He said: “This is quite an urgent issue - emissions from cars are increasing, people are buying cars all the time. We don't want them to stop driving, but we want to them choose the ‘greenest’ car. They need the biggest possible incentive, that’s why the Government should be even bolder - really penal rates for high-emission cars and really attractive ‘carrots’ so that tax is almost nothing on the ‘greenest’ models.”

However, he said that because three out of every four cars bought were secondhand, the tax should apply to old as well as new cars.

And, in a bid to encourage owners of older more polluting vehicles to remove them from the roads, the MPs advocated a ‘scrappage’ scheme.

The report says that projected savings on carbon emissions were ‘far less than they could be’. Mr Yeo concluded: “According to the Government’s own figures, these changes will only have a very limited impact on the environment.”

The minority report, by one Tory and two Liberal Democrat MPs, condemned the findings of the official report. It called for the VED changes to be put on hold until the Government had produced a detailed analysis of how the changes would affect those on low incomes, and whether it would make drivers buy ‘greener’ cars.

Plans should also be introduced to ensure tax bands of second-hand cars were clearly labelled by dealers, and proceeds from the tax should go towards designing more environmentally friendly cars, it said.

(BBCnews.co.uk/national newspapers)