Environmental Audit Committee Report on VED

Out of touch with the real world and out of touch with real people

04 August 2008

a car tax disc

The AA has attacked the findings of the Commons Environmental Audit Committee report on Vehicle Excise Duty as "out of touch with the real world and out of touch with real people."

The report states that there is "nothing intrinsically unfair or unusual about setting new VED rates for cars that have already been purchased." AA members disagree particularly when for some cars the VED will more than double from £210 to £430.

More than 80% of AA members agree that road tax is being used as a stealth tax, according to a recent AA Populus panel of 15,306 members.

AA president, Edmund King, said; "It is intrinsically unfair and unusual to introduce a new system of taxation that applies to families who have already purchased their vehicles and are unable to sell them. This is not sending out a green signal but a mean signal and is penalising many families who cannot afford to change their car. Previous TRL research looking at the effects of a £25 charge for Band G vehicles in London found that larger low income families and ethnic minorities would be adversely affected as they tend to need larger cars.

"The used car fleet could be cleaned up by targeting the 1 million or so untaxed, uninsured, unregistered cars and crushing them, rather than picking on poorer, law abiding motorists. A "scrappage scheme" might be worth considering but somewhat back-fired in France as many farmers cashed in on rotting 2CVs found in their barns."

The AA president has already written to the Chancellor requesting that the "retrospective" nature of Vehicle Excise Duty for cars registered between 2001-2006 should be scrapped.

Whilst 70% of motorists agree that a tax system based on CO2 will influence the type of cars bought there is confusion and lack of information about the system which the committee seems to accept. Three quarters of motorists agree that by "backdating" the charges the value of some used cars will be damaged and people will keep older cars longer.

AA/Populus panel results show:

  • 35% do not understand the new system of VED
  • 70% agree that having a VED system based on CO2 will influence the type of car purchased
  • 59% disagree that all cars registered from 2001 should be subject to the new tax system
  • 56% say the new system for post 2001 cars should be stopped (22% neither agree nor disagree,19% think it should go ahead)
  • 58% have not seen information about changes relevant to post 2001 cars
  • 82% agree that road tax is being used as a stealth tax
  • 35% agree that the new showroom tax will make a difference to the types of cars people buy, 48% disagree
  • 77% agree that backdating the road tax changes will damage the value of some used cars meaning that people will keep older cars for longer

factfile

Populus received 15,306 responses from AA members to its online poll between 4 – 16 July 2008.

Environmental Audit Committee Reports » (link opens a new window)

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25 July 2008