Environmental benefit of road tax hike questioned

Changes to the way cars are taxed will lead to an extra £2.5bn in revenue for the Treasury but an annual reduction of just 1% in carbon emissions, according to the Conservatives.

Putney MP Justine Greening (Con) put forward Parliamentary Questions asking for the Treasury’s predictions on cash likely to be raised by Vehicle Excise Duty (road tax) and Department of Transport predictions for CO2 emissions from road transport.

According to the Conservatives’ the results show that those driving bigger cars can be expected to pay much higher road tax, with revenue rising from £1.9bn to £4.4bn, while the cuts to emissions are likely to be around 1%.

This has led to accusations that the Government is using the environment as an excuse to justify ‘stealth taxes’.

Under the new tax scheme, cars producing less than 100g of CO2 would be exempt while the big emitters – sports cars, large SUVs and some people carriers – will see annual road tax increase to £440.

There is a sliding scale between these two extremes.

The Treasury projections seem to go along with what many critics have long suspected – that taxation at this level is unlikely to affect people’s choice of vehicle.

Those who can afford larger cars are unlikely to be swayed by a tax increase of a hundred pounds or two while those who already have cars are unlikely to change their vehicle following the tax changes.

Defenders of the new system argue that it is more in-line with the polluter pays principle with motorists being charged in accordance with their environmental impact.

A statement from the Treasury said: “The Government is committed to protecting the environment and tackling climate change.

“Part of this commitment involves promoting sustainable environmental improvements through tax and other economic instruments, and incentivising the development and uptake of lower emissions vehicles.”

Sam Bond

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