Ben Webster, Transport Correspondent
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Motorists will pay £2 billion more next year after the Chancellor announced the highest increase in fuel duty for eight years and raised road tax on gas guzzlers by a record 40 per cent.
The 2p-a-litre rise in fuel duty was deferred for six months, allowing Gordon Brown to avoid the risk of a repetition of the petrol protests of 2000 until after he is expected to become Prime Minister.
However, the deferral means that there will be two rises in six months, with the 2p rise on October 1 followed by a further 2p increase on April 1 next year.
The AA said that the rises, together with a predicted increase in the oil price, would result in £1 a litre becoming the normal price at the pumps.
Mr Brown said that there would be a further 1.8p-a-litre rise in fuel duty on April 1, 2009. If inflation remains at 2.8 per cent, this would mean fuel duty rising above inflation for three consecutive years.
A Treasury spokesman said that the total collected in fuel duty would rise by £1.5 billion to £25.1 billion next year.
The sum raised in vehicle excise duty, known as road tax, would increase by £500 million to £5.6 billion, he said.
From today, the owners of the 175,000 cars registered since March 23 last year that emit 225g of carbon dioxide or more per kilometre (g/km), will pay £300 when renewing their annual tax disc. From April next year, they will pay £400.
The majority of motorists will pay £15 more for their tax discs from today, with £5 increases in April 2008 and April 2009.
Mr Brown said that reductions in air pollution from diesel engines had persuaded him to equalise the rates paid by diesel and petrol cars. Until today, diesel cars had paid £10 more per year than petrol cars.
However, he failed to mention that he was removing the difference by raising the petrol rate to the diesel rate, as well as adding £5 to both rates.
The road tax rate for the 300,000 cars — or 1 per cent of the total — in Band B (101120g/ km) decreases to £35 today. Mr Brown described this as a 30 per cent cut, but most Band B cars are diesel and were paying £40, meaning the cut for them will be only 12.5 per cent.
Mr Brown also claimed that he was raising the top rate by 30 per cent, but the increase is 40 per cent for diesel cars in Band G and 43 per cent for petrol vehicles. A Treasury spokesman admitted that the 30 per cent figure was misleading, saying: “I agree it’s odd. It’s the kind of thing that appears in Budget speeches.”
The Freight Transport Association said that Mr Brown had abandoned a policy of taking account of world oil prices when setting fuel duty. “He is saying that he is raising duty regardless of the oil price, which could mean very punishing increases in the cost of fuel,” it said.
The AA said that Britain already had Europe’s highest fuel taxes and would extend its lead. Paul Watters, the AA roads policy head, said: “The six-month deferral of the 2p rise is a political manoeuvre by Brown to insulate him from the potential for protests until after he becomes Prime Minister. If oil prices rise again, the successive 2p increases could mean £1-a-litre becoming the norm.” Mr Brown said his objective “beyond 2012” was to cut emissions from the average new car from 167g/km to 100g/km.
The Chancellor announced a review of the vehicle and fuel technologies needed to “decarbonise road transport” over the next 25 years. The review will be led by Professor Julia King, vice-chancellor of Aston University, who will work with Sir Nicholas Stern, author of the recent government report on climate change.
Mr Brown unveiled a tax incentive for company car drivers to switch to vehicles that run on 85 per cent bioethanol made from plants. He also proposed to end an employee car ownership scheme loophole that lets drivers avoid higher company car tax on gas guzzlers.
The Chancellor rejected imposing VAT on domestic airline tickets, saying there would be little environmental benefit. However, he signalled change in air passenger duty to lower the rate paid by premium economy passengers and increase it for business-class-only flights, on which passengers pay at the economy class rate.
The best and the worst: how green is your car?
Cars most affected by Budget announcement on road tax changes
The amount payable by cars in Band G, which covers those emitting 225g of CO2
per km or more, increases to £300 today and £400 next April
BMW X5 3L petrol 307g/km
Land Rover Discovery 2.7L diesel 249g/km
Renault Espace 2.0 petrol 232g/km
Road tax on fuel-efficient cars in band B, covering those which emit 101-120g
of CO2 per km, falls to £35 today and remains frozen at that level for the
next three years
Peugeot 107 109g/km
Citroen C2 1.4L diesel 108g/km
Fiat Panda 1.3L diesel 114g/km
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It is okay saying how poor the government is doing and that 70% fuel duty is a joke, but what is the Times and other media outlets doing about it. There is no forum where British people can ask questions and find the truth.
People seem to forget that we have the power to make things change, if we collectively came out and said they didnt want increased fuel duty and road pricing then they would be scrapped. The government has to answer to us, we live on a democracy and we vote for them.
Andrew, Belfast, Antrim
"People dont seem to realise-If Im taxed too much then I'll move to where Im not.
Once I get my degree, Im off. Oh and thanks to the UK government for paying for it. "
What a fool. It was taxes that paid for your uni tuition fees and now you whine about them.
Enjoy the US with its lack of support to the lower paid workers who find state support such as the NHS a real help.
Take your selfish, individualist attitude elsewhere.
We could do with less of you in this country (as well as less of the ones who actually abuse the state, but lets save that for a new day).
Jamie, Halifax, West Yorkshire, UK
How do Labour stay in power? Im a relatively well off student, so youd think id be happy, but Ive had enough of this country. We are taxed rediculous amounts-One of my friends just emigrated to the USA-he earns 1/3 more than he would here, life is much cheaper and the tax is so much lower.
People dont seem to realise-If Im taxed too much then I'll move to where Im not.
Once I get my degree, Im off. Oh and thanks to the UK government for paying for it.
Barns, Cardiff,
Frankly, on taxation, we in Britain get what we deserve.We seem to lack ANY motivation for collective complaint. Despite enormous tax increases over 10 years we see little significant public services or NHS benefits. The money is being squandered. Transport related taxation measures announced in the budget 21/3/07 will NOT benefit the environment. Frankly, we deserve better leadership than this. For example, it would be fair to increase tax specifically matched to the cost of providing carbon offset programmes (eg cost to plant more trees & high growth rate plants that consume the CO2 by photosyntheses). And lets see some TRUE environmental leadership from our political leaders by them influencing other countries to cut CO2 emissions, starting with our "special relationship" USA "partner" who causes 25% of the WORLDS CO2 production compared to our 2%. Lets collectively get VOCAL & DEMAND better & more imaginative leadership and less state taxation without proportionate benefits.
Alistair Beveridge, Largs, Scotland
after reading the views here I hope that the complainants won't go out at the next election be they local or national and vote them back in for another term. We British moan but we don't do anything, so govts. think they can get away with anything. Admittedly the other bunch aren't any better but we need to show the government is meant to serve the people and not to continually rip us off lining their own pockets with inflated expenses claims and giving themselves 22% pay rises. And with this dreadful government and another dreadful party waiting in the wings is the reason why I'm applying to emigrate.
Tony, Bourne, UK
So whats new after 10 years. My only comment is God help us if and when gordon brown ever becomes PM. we will just become a socialist bananna republic. If I was younger I would emmigrate.
The real problem that no politician will grasp is the geometric growth of the world population which is the underlying cause of all the serious problems both nationally and internationally. But i suppose that is just too hot a potatoe!
John Mcara, Callington, Cornwall
I am sick of this government, anything to get yet more taxes out of the uk people.
Are we not taxed enough?, what about the horendous rises in council tax?, so that with running a car and running a home, its a wonder we can survive in this country at all.
Jason, Bournemouth, Dorset
Thank god i left the UK 40 YRS ago.& to think we in the US complain about 30 P a liter.
About time you guys had a revolution.
brian lee, medina, usa ohio
Thank goodness i have never voted Labour. So called "party of the working man" That's a laugh, they are going to make Britain a very uncompetitive country to do business in with it's high tax economy. Then again who says we are not at the moment...
ANDREW EZEA, london, Uk
I've converted my Defender (a working vehicle) to run on vegetable oil, cost £1200. However, after duties, VAT and 10% loss of economy it is cheaper to run on fossil fuel. Oh, and my tax will be doubled. I do my bit to reduce fossil fuel CO2 and get clobbered, cheers Gordon.
Jim Guy, South Brent,
Mr Blair and his croney Mr Brown could alter the emmissions TODAY by useing fuel made from sugar beet or linseed or oil seed Rape, they choose to ignore this because you would want a reduction in petrol prices, We all could benefit from this TODAY, but you can use it as long as you PAY the DUTY at there usual rate of TODAY.. These people are the most two faced people on the planet, you can go GREEN but they don`t want to rock the boat while doing it, After all it is our money they are playing with all the time..
They want your MONEY ONLY and to hell with how the planet suffers.
When they say it is important to do this why are we still burning fossil fuels when it could be changed and emit no gases from cars what ever.. They are just thieves in disguise..
When they want to get women off the streets, they advocate they should be legalised in houses or flats, and checked for diseases, What does that make them,, (PIMPS) living off the bodys of women who may have no alternative..
C Dakin, Wisbech, UK
I have to laugh at Gordon Browns Buget. I am a community nurse looking after people in the community and a car is essential to my job. Mr Brown put up the fuel which goes into my car and the tax which i need to run my car on the road but gives me and colleges like me 1.9% rise in wages and fails to increase car allowences I get for using my own car, which I am also taxed on. And he talks about improving the NHS "What a joke".
tony t, liverpool,
why are the goverment killing the average person with higher and higher tax for a item that is used mainly to get to work due to the fact that our public transport system is hugly expensive and inefficent.
the answer is simple, to hid the ever increasing gaffs and cost over runs, just look at the olympics goverment says £2.3B not even 18months on revised cost 9.3B - even my builders aren't that bad!
graham, uk,
what a joke petrol up tax up,maybe mr brown should pay for his own tax insted off ripping off his voters
joe, coventry, england
i feel diapointed as many people about the car tax increases, we put all our family saving to buy a gas converted range rover and i have brought a caravan so as a family we could afford holidays for the children, but as a normal working family hardship has to come into our life yet again ,as we seem to get going in life then we find steif taxes and ones that labour feel they can tell us about that they are putting up.And then we have to start all over again planning our life out so we can live a normal life without debt and hardship. i think labour can go to hell im no better off for working hard and trying to plan a cheaper future.
keith smith, Coseley, west midlands
When Prescott was minister he told us that converting our vehicles to LPG was the best thing for all,low price of fuel,no noxiuos emmisions etc etc ..........He also promised that the duty on this fuel would be kept low. I used some of my redundancy money and went on a course to install LPG systems on cars,my own was the car I passed the tests on and was duly registered with the LPGA.
Now as my car is a Range Rover as are the many I have converted, we are told that it is going to make no difference to our tax we pay even if we have lowered our emmisions to practically zero. My car starts on LPG and does not need any petrol at all and what does he do , he puts 4p per litre on LPG from October. We get conned all ways. In Italy there is a move to make LPG powered vehicles tax exempt ,and there are alot of cars there run LPG or CNG systems and to my way of thinking this a move we should be encouraging here, BUT>>>>>>>>>>>>>>>>!
W H Berry, DERBY, DERBYSHIRE
Yes all very good for the Treasury, but not good for the
enviroment. The money should be put into a seperate pot to improve the enviroment.
R.Melor, Stone, Staffordshire
Introduce "proportional representation" straight away and effect the Dunfermline principle, then "England" will no longer have the majority of its voters rampaged and plundered by the red minority (32% at the last election) and Scotland can then enjoy the benefits of Mr Brown and his brothers if Mr Salmond does not do for them first.
m.a.clifton, Chichester, England
The fuel and car tax duties seem about in line with inflation to me, which just shows what a great lie the headline figure is. We quite simply cannot and should not trust these liars with our money.
Brown sold 14.5m ounces of our gold at about £129 an oz, today the price is £337. That's enough to buy a £10,000 car for 300,000 households. Admittedly under his tax regime they wouldn't be able to drive it, but thats real poverty reduction.
William David, Winchester,