Road tax increase 'will hit 9.4m'

Labour backbenchers have criticised the reforms to the road tax system New car tax rates

An estimated 9.4 million motorists will have to pay more road tax under reforms aimed at punishing "gas-guzzling" vehicles, the government has admitted.

Official estimates say vehicle excise duty will rise for 43% of vehicles made since 2001 - by up to £245 for the most polluting ones - but will fall for 18%.

The AA said the figures, for 2010-11, confirmed "our worst fears", while the Tories said the PM misled Parliament.

No 10 rejected that suggestion and said the aim was to cut carbon emissions.

Environmental groups have urged the government to "stand firm" on plans to raise excise duty.

'No worse off'

Friends of the Earth has also called on ministers to invest the money raised in better public transport, which it said was a "greener" alternative to the car.

The estimates, which were revealed for the first time in a Parliamentary answer by Treasury minister Angela Eagle, have reignited the row over road tax changes, which have attracted criticism from a number of Labour MPs.

IMPACT ON MOST POPULAR CARS Car* Tax change** Ford Fiesta 1.2 P Zetec Climate £0 BMW 3 Series 2.0 D 320D SE +£18 Ford Focus 1.6 P Zetec Climate +£5 Vauxhall Zafira 1.6 P Life E4 +£35 Land Rover Freelander 2.2 D TD4 GS +£60 *Top five based on 2007 sales. P = petrol, D = diesel **Figures apply 2009-10 Source: Society of Motor Manufacturers and Traders Limited

Ms Eagle said experts believed that in 2009-10, "a third of cars will be better off in real terms, and in total, approximately 55% of cars will be no worse off".

However, it is believed that a little more than 44% - 8.7 million vehicles, all in the six top-polluting bands - will pay more, she added.

For 2010-11, 18% (3.9 million people) will pay less tax, 39% (8.5 million) will see no difference and 43% (9.4 million) will be worse off.

It is calculated that the Exchequer will receive more than £1 billion in additional revenue from the scheme by 2011.

Ms Eagle also admitted that five of the UK's 30 most popular cars would pay more - the 2.2l diesel Land Rover Freelander, the 1.6l unleaded Toyota Auris, the 2.2l diesel Honda CR-V, the 1.8l unleaded Vauxhall Vectra and the 1.6l unleaded Vauxhall Zafira.

At Treasury questions in the Commons on Thursday, minister Jane Kennedy added: "Clearly low-income families who have motor vehicles will be among those that are affected."

She was unable to say how many households this would affect, however.

Shadow Chancellor George Osborne seized on Gordon Brown's earlier claims that the majority of drivers would benefit from the reforms.

'Another fiasco'

Mr Osborne said: "This destroys the government's defence that this is a green tax and in general gives green taxes a bad name.

"We need the prime minister to tell us whether he knew that he was giving Parliament the wrong information and was treating the public like fools, or was it the case that he didn't know the truth about the impact of his own Budget on families?"

IMPACT ON ALL CARS How many cars in each tax band will pay less, same or more tax? Band C02 (g/km) Paying less tax Paying same tax Paying more tax A Up to 100 - 100% - B 101-110 100% - - C 111-120 20% 80% - D 121-130 100% - - E 131-140 100% - - F 141-150 - 100% - G 151-160 - 100% - H 161-170 - 40% 60% I 171-180 - - 100% J 181-200 - - 100% K 201-225 - - 100% L 226-255 - - 100% M Over 255 - - 100% All bands   18% 39% 43% Figures apply 2010-11 onwards Source: House of Commons

Later in the Commons he added: "Everyone knows the government is sleepwalking into another 10p tax fiasco.".

Conservative leader David Cameron also called on Mr Brown to "correct himself and apologise".

"Will he admit that when he told me from the despatch box that a majority of drivers would benefit that he was wrong?"

However Downing Street pointed out that Mr Brown had told MPs at question time on 14 May that "the majority of motorists will benefit or pay no more in vehicle excise duty as a result".

That was the position the government had repeatedly set out and was confirmed by the Treasury figures, Mr Brown's spokesman added.

And later Ms Eagle told the BBC News Channel: "Why don't we actually talk about the detail of the policy rather than this process [of] tittle-tattle about what the prime minister might have said in half a sentence."

AA President Edmund King said the changes were "politically dangerous", however, with high petrol prices already pushing up the cost of motoring.

Nearly 50 Labour backbenchers had signed an amendment to the Finance Bill asking the government to rethink its plans for car tax, but the government managed to avert a rebellion in the Commons.

Chancellor Alistair Darling was reported to have promised the rebels that there would be moves this autumn to ease the transition.

Core vote

However, giving evidence to the Environmental Audit Committee, Ms Eagle distanced herself from suggestions that the government could backtrack, insisting: "We have set out our stall on the direction of policy."

But she hinted that drivers could be offered cash to scrap older high-polluting vehicles rather than selling them on - a move supported by Friends of the Earth.

I don't think we have heard anything from people who benefit from the changes Angela Eagle MP Treasury minister

One of the Labour rebels, Ronnie Campbell, told BBC Radio 4's The World at One: "I think we have got a commitment from Alistair [Darling] to look at it in the Pre-Budget [report] in October."

He said backbenchers were "flexing our muscles and saying, 'Come on, be careful here. You're going to tax these people, they're working class people, they're our core vote.'"

Shadow Treasury minister Justine Greening said people saw changes to road tax as "stealth" charges - "a mechanism to get money out of their pockets".

But Ms Eagle denied the Treasury was simply trying to raise cash, saying if they were, there were easier ways to do it.

She also said the government was "willing to listen" to voters' concerns and "have a look" at its policies accordingly.

Ministers would be accused of being "arrogant and out of touch" if they did not, she added.

The Liberal Democrats' transport spokesman, Norman Baker, said the government "must have a death wish" by introducing taxes which were "penalising" people for having cars they may have chosen several years ago.

"Eventually we should cut car taxes and introduce road charges on a pay-as-you-go basis that will not penalise those with no option but to drive," Mr Baker added.