The Treasury confirmed on 29th April what had been overlooked by the RMIF and others at the time of the Budget announcement, that it was abolishing an existing VED exemption on higher road tax rates for vehicles emitting more than 225g of CO2/km registered between March 2001 and March 2006, to encourage owners of these vehicles to replace them with newer, environmentally friendly models.
However, Robinson disputed the effectiveness of this measure: The extra costs involved in running these older vehicles will make them extremely unattractive to potential buyers, thereby ruining trade-in values for dealers. At the same time, many motorists may feel that they are better off running these vehicles into the ground rather than lose money selling up. As a result the measure is unlikely to achieve any substantial reduction in CO2 levels.
The Association of British Drivers also issued a release referring to the hidden backdating of draconian VED rises for cars registered between 2001 and 2006 in the Budget, which, the ABD pointed out, were bought when nobody knew that 225g/km would be an important threshold.
ABD chairman Brian Gregory said: "Recent budgets have featured rises in vehicle excise duty for less efficient vehicles but these have always been restricted to new vehicles to discourage purchase and have not been retrospective. In the 2008 budget these taxes were not only raised and new banding introduced but by backdating the increases to cover vehicles registered since 2001 Alistair Darling has at a stroke punished those who cannot afford newer, more efficient cars."
ABD spokesman Nigel Humphries added: "This impacts hardest on poorer families who need larger cars. Such drivers may not even realise the huge rises on older Mondeos, Lagunas, Vectras and Galaxies even with middle range engines until VED renewal time. Even some smaller cars such as Astras and Focuses are hit if they are unlucky enough to have an engine in a higher CO2 band. Such families face a double hit as their cars will plummet in value due to the tax changes.
"Already the trade guides are predicting large drops. The arrogance of Darling is astonishing. When questioned in a radio interview following the budget he suggested that those affected needn't pay higher VED as they could buy new cars. Just how are they supposed to do that when food, council tax and mortgages are all up way above 'inflation'?"
The organisation has called for the scrapping of VED and a revenue neutral amount put on fuel tax. Fuel tax is the only fair tax as it depends upon usage and efficiency rather than taxing vehicles regardless of mileage. If the government wishes to reduce CO2 output then taxing use of fuel is clearly the most effective, fairest and simplest method.
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