Gas-guzzlers to be taxed higher

DRIVERS choosing 'gas-guzzling' cars will be penalised under Government plans to widen the gap in road tax rates between the lowest and highest-polluting cars.

The plans, which are the subject of detailed discussions between the Treasury and the Department for Transport, are designed to persuade more motorists to choose smaller and more efficient cars in an effort to help the UK meet its climate change obligations.

Ministers are concerned that existing vehicle excise duty (VED) rates are insufficient to deter people from buying the cars that cause the most damage to the environment. The current bands mean that drivers with cars less than 1,600cc save £55 each year in road tax, paying only £110, compared with £165 for bigger-engined cars.

Transport Minister David Jamieson, speaking at a seminar on vehicles and climate change organised by think-tank, the Institute for Public Policy Research (IPPR), said: 'People have suggested a much higher band for gas-guzzlers. We will be looking to see how we can use VED to better reflect emissions. I suspect more people will be guided by their pocket than by their environmental concerns.'

The IPPR predicts carbon dioxide emissions from transport will grow by 15% by 2020 under the current tax regime. But the Government has pledged to cut emissions by 20% by 2010 and by 60% by 2050.

One key initiative will introduce colour-coded labels that will rank new cars according to their pollution rates (Fleet NewsNet November 2002). Final VED bands have not yet been fixed, but they are set to affect petrol cars with engines of more than 2.0-litres, depending on efficiency. Diesels, which produce lower CO2 emissions, will be banded differently.

Julie Foley, an institute research fellow at the IPPR, said: 'The average motorist hasn't a clue what the carbon dioxide rating of their car is and how it compares.' Consultation on the changes could be launched as early as next month, when Chancellor of the Exchequer Gordon Brown delivers his pre-Budget report.