Are you a bad person? According to a list issued by the Vatican this week, “polluting the environment” is now a mortal sin - news that may unsettle the nation's 32 million motorists.

Meanwhile, drivers of the most polluting vehicles were condemned in material form by the Chancellor on Wednesday, when he announced a new “showroom tax” of up to £950 on “gas guzzlers” from 2010. The move came within a wider shake-up of vehicle excise duty, so what will the changes mean for your wallet and the environment?

The new system adds six new road tax bands to the existing seven from 2009. This creates a range from A to M based on CO2 emissions. From 2010 drivers of the most polluting new cars will face inflated road tax - labelled “showroom tax” - in the first year, while drivers of the greenest will pay nothing in the same period. After this first-year rate cars will revert to new standard rates.

Mr Darling said that, overall, most drivers will pay less road tax or be no worse off. However, “most” excludes millions. For example, about 2.5 million cars in the existing top band, G, face an increase from £300 to £400 in 2008-09. The cars will then move into the new bands L or M, with tax of £415 or £440 in 2009-10. People who buy new cars in these bands in 2010 will be hit for £750 or £950.

Rose-tinted specs fail to offer hope

The obvious justification for Mr Darling’s relatively upbeat scenario is that the outlook is fraught with uncertainty

Background

• Darling's first Budget: the main points

• The Chancellor's speech in full

• Darlings first Budget: the reaction

• Chancellor hits the home budget as his debts soar

• Need to know: Budget 2008

The Chancellor delivers a modest Budget

As so often is the case, virtue, in terms of improving public finances, is not now, but at least a year away

Multimedia

• Video sketch: Matthew Parris and Ann Treneman

• Eco-worrier: should we be pleased?

• Green Central: round-up of the green Budget measures

Related Links

• 'Showroom tax’ takes shine off fuel duty delay

• Green tax revenues near record low

Andrew Howard, of the AA, says: “What is not appreciated about the current Band G is just how ‘normal' many of the cars are. It covers people carriers as well as higher-end saloons and 4x4s, so it catches ordinary families as well as the extravagent.”

Less obvious Band G cars include the Ford S Max people carrier, the Skoda Superb saloon and certain Vauxhall Astras, Vectras and Zafiras.

The attack on Band G drivers angered many readers of Times Online, who said that it would hit rural communities as well as families. Trevor Roots, of Cairnie, Aberdeenshire, wrote: “It is indefensible. As a former farmer, now living on a rural smallholding, my 4x4 is a necessity. However, to do my bit for the environment I have halved my mileage to less than 6,000 a year. I'm sick to death of being perceived as anti-environment and viewed as nothing more than a 'tax cow'.”

Mike Gallie-James, of Chelmsford, added: “Is it better to run a gas guzzler or to run two cars to accommodate family and dogs? I will now surf the web for a 4x4 or people carrier for a family of six, plus dogs.”

Farmers and families will not be the only ones to lose out. Showroom tax will be payable on all new cars with emissions above the current average of of 160g/km. These include such “average” cars as the two-litre Ford Mondeo at 189g/km.

Drivers set to benefit from the changes include buyers of greener “runarounds”, as well as hybrid and electric cars. They will pay no tax for the first year and reduced - or zero for cars below 101g/km - tax thereafter. Cars in these categories include the Fiat 500, Honda Civic hybrid and the battery-powered G-Wiz.

Steve Fowler, of What Car?, says that the £10,995 Seat Ibiza Ecomotive is a good green choice. “It is a sensible supermini with decent space and kit - and at 99g/kg, you won't pay tax.”

While the range of low-emission options is increasing, retailers agree with motoring and environmental groups that the Government should do more to encourage manufacturers to develop new models. Sue Robinson, of the Retail Motor Industry Federation, says: “Consumers need to be given a proper choice, and manufacturers and vehicle dealers need to be able to give it to them.”

Lack of choice may be limiting the number of cars in the lowest A and B bands. Band C, however, contains the highest proportion of cars in all bands, spanning vehicles with low to medium emissions, from 121g/km to 150g/km. Many drivers in the band (those with emissions up to 140g/km) will see small savings. Qualifying cars include the Ford Focus, Renault Clio, Citroen C2 and Mercedes A-Class.

For most motorists, the week's talking point was not the road tax overhaul but the delay from April to October of the 2p increase in fuel duty. The move, which Mr Darling said would help families and businesses, was welcomed by the AA as “temporary relief”. However, the association's president, Edmund King, cautioned that the increase should be scrapped totally if petrol prices remain at record levels in the autumn.

The Chancellor also resurrected the idea of road pricing - charging motorists by the mile, as practised in much of Europe - only days after Ruth Kelly, the Transport Secretary, appeared to rule it out. Peter Roberts, whose petition against the scheme at the Downing Street website secured 1.8 million signatures, says: “It is a new tax which will not only penalise us financially for using roads we have paid for, but will require hugely expensive infrastructure. Fuel tax is the best and most cost-effective way of charging for our roads - remove road tax, put a few pence on fuel and we have a perfectly fair, simple and unavoidable tax system to pay for our road network.”

If the Budget angered some motorists, it did little to please environmental campaigners and was branded “light green”. Friends of the Earth, for example, said that Mr Darling had “fallen way short” of his promise to put sustainability at its heart. The group said that the new road tax incentives for greener cars were a “step in the right direction” that would not go far enough to drive significant changes in purchasing decisions.

Anita Goldsmith, of Greenpeace, agrees: “The incentives are too small to spark the pollution reductions we urgently need. The Chancellor is right to bash gas guzzlers, but it means little while he ploughs billions into encouraging new motorists with motorway-widening schemes to make room for more cars."

Case Study: 'Incentive to upgrade'

Chris Dawson drives a Ford Fiesta, bought in 2004 while he was at university, James Charles writes. “It is a great student car: affordable to keep on the road, insurance is inexpensive and it doesn't burn through petrol,” Mr Dawson says. “The road tax is also reasonably low.”

The 26-year-old, left, now works as a business development manager for NHS Direct, driving up to 1,000 miles a month to meet clients in the North East.

His Fiesta has a 1.4 litre engine and produces CO2 emissions of 154g/km (grams per kilometre), placing it within Band D of the current vehicle excise duty scheme, costing Mr Dawson £145 a year in road tax.

From 2009, however, the car will move to Band G, which applies to cars with C02 emissions of between 151g/km and 160g/km. His road tax will, therefore, increase to £155 a year. “It is another incentive to upgrade to a cleaner, more efficient model,” he says.

Mr Dawson currently spends £200 a month on fuel and is relieved that the Chancellor delayed the rise on fuel duty in Wednesday's Budget. He adds: “With the cost of everything else rising, it will certainly take off the pressure for a while.”

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