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High CO2 cars targeted by Budget | |
(about 6 hours later) | |
Cars that produce large amounts of carbon dioxide (CO2) will be hit by new measures in Wednesday's Budget, according to reports. | |
Chancellor Alistair Darling is expected to introduce measures to encourage the use of cars with low CO2 emissions. | Chancellor Alistair Darling is expected to introduce measures to encourage the use of cars with low CO2 emissions. |
Weekend newspaper reports say the chancellor might introduce a levy on new, larger cars that could increase their price by £2,000. | |
The tax would hit new saloons, estates and people carriers, the reports say. | |
Showroom price | Showroom price |
The Sunday Times quotes a Treasury official who says that car buyers will "take more notice" of a charge that directly affects the car's showroom price rather than the existing incentives based on road tax. | The Sunday Times quotes a Treasury official who says that car buyers will "take more notice" of a charge that directly affects the car's showroom price rather than the existing incentives based on road tax. |
At the moment, cars that produce fewer than 100 grams of CO2 per kilometre do not pay road tax. | |
The charge is on a sliding scale that runs up to £245 a year for cars that produce more than 224 grams per kilometre. | The charge is on a sliding scale that runs up to £245 a year for cars that produce more than 224 grams per kilometre. |
It is thought the chancellor might also adjust those rates to make environmentally friendly cars more attractive. | |
Fuel duty | Fuel duty |
Both the Sunday Times and the Observer say the chancellor is likely to accept proposals from a report commissioned by the Treasury from Julia King, the vice-chancellor of Aston University. | |
Her report urged the government to make the most polluting cars more expensive, by raising their price or running costs. | Her report urged the government to make the most polluting cars more expensive, by raising their price or running costs. |
The chancellor has also announced plans to raise fuel duty by 2p per litre in April. | |
That move is deeply unpopular with hauliers who have called on the government to scrap the duty increase. | That move is deeply unpopular with hauliers who have called on the government to scrap the duty increase. |