ETA: New tax hike won’t hit all 4x4s

Chancellor uses mirrors to pretend he is tackling climate change but fails to seriously encourage greener cars

Wednesday, 21 March 2007, London: The chancellor will give the impression today that he is dealing with the “Chelsea tractor” by raising the top band of VED from £210 to £400 over the next two years. On the face of it - a dramatic increase, but the Environmental Transport Association (ETA) says it has 90 different models of 4x4 in its most recent Car Buyers Guide, published last week, and only half are in the top band (the rest are in bands E and F). Also, unlike the other bands, the top band (G) only affects cars under a year old. Two year old cars that would now be classed as band G are still classed as band F so will remain unaffected by the headline change. Less than 1% of cars would be affected by the band G increase.

The ETA claims that to have a serious effect on car purchase the Chancellor must concentrate on the VED bands that have the most cars in them – bands C and D. These have up to twenty times as many cars in them as band G. The Chancellor must reduce VED significantly on band B and moderately on band C while increasing the higher bands. This would send a powerful signal to motorists to drive less polluting cars.

The good news is that the top ten cars in the ETA’s latest Car Buyers’ Guide are all in band B and attract just £50 VED. The top city cars like the G-Wiz and Nice car pay no VED at all (nor any congestion charge). The ETA’s Car Buyers Guide provides information on the tax band of any car in the market today.

"We know that increasing numbers of people want to make informed choices about cars particularly in terms of carbon emissions and the damage caused to the environment,” explains Andrew Davis, director of the ETA. “It is not surprising that the winner this year was again the Honda Civic Hybrid. What is more striking is the huge range between the best and worst - the greenest and the least green cars in Britain today.

“Manufacturers don't make cars that consumers won't buy. It needs consumer pressure alongside government leadership to help persuade manufacturers to allow us the choice to buy cars that are more environmentally sound."

The ETA warns that taxation must be seen to be fair otherwise the public will be become even more cynical about politicians’ motives and undermine the maxim of the polluter pays. If the Chancellor claims VED is an environmental tax then he should provide supporting evidence and not pander to blind prejudice. The Stern Report stated that the environmental cost to society of producing CO2 was £43 per ton. In other words if you were to produce a ton of CO2 you should compensate society £43. A new vehicle like the Jeep Grand Cherokee, which is band G, would have a VED of £400 – the equivalent of £68(1) per ton of CO2. So even before petrol tax is added to the motorists’ costs they have paid more tax than Stern was requiring. Would that the government charged other polluters at such a rate!

The ETA is the provider of Britain’s only climate neutral automotive breakdown service, and considers helping people to choose which car to drive as one of its most important objectives. Cleaner motoring advice is just a click away with the ETA.

www.eta.co.uk

Notes: (1). Jeep Grand Cherokee is band G which carries a VED rate of £400, and has a CO2 output of 366g/km and assuming an average mileage of 10,000 miles travelled a year. 10,000 miles at 366g/km equals 5.9 tons or £68 a ton of CO2.

Editor’s Notes
About the ETA

The ETA offers a comprehensive breakdown service across Europe. Their services also include motor insurance, cycle insurance, cycle rescue, travel and house insurance.



The mission: The aim of the ETA is to be the ethical alternative to other motoring organisations. Through the services above funds are generated for the ETA’s campaigns.

The aims:

To help ETA members and the general public take practical steps in reducing their impact on the environment and to demonstrate that people who make such changes have a better quality of life.
To encourage government at all levels to understand the benefits of doing less but making more impact. ETA transport proposals would reduce the national government’s expenditure on transport to almost zero whilst improving the transport system.