You are in > manchester.com  > News > RAC: Drive down road tax

Finance

RAC: Drive down road tax

04/07/2008

Persuading the chancellor to drop the October 2p fuel duty increase will not be enough to help motorists if the government goes ahead with its plan to raise road taxes, the RAC said.

Treasury plans to raise over £2 billion from Britain's road users before 2011 will cost the road user four times more than would be saved by persuading the Chancellor to drop the 2p October fuel duty increase, the motorists' organisation said.

The RAC said £1.2 billion of the increase comes from planned changes to vehicle excise duty, which the foundation has criticised because of the retrospective nature of the changes.

According to the group, in 1975 income from motorists (£11.6 billion in 2006 prices) was broadly equal to spending on the road network (£11.1 billion).

Today, the government takes four times as much from the motorist (£31.2 billion) as it spends on the roads (£8.2 billion), making the difference between tax and investment 460 per cent greater than in the mid 1970s, the RAC said.

Stephen Glaister, director of the RAC Foundation, said: "The chancellor may pull a populist rabbit out of the hat by scrapping the October 2p rise, but this will be a drop in the ocean compared to his plans to take an extra £2 billion from the road user's pockets by 2011."

The plan to raise road taxes for cars with higher CO2 emissions has been criticised by some MPs and motorists' groups, as it would be applied retrospectively.