[F31-340i]

I went looking on the No. 10 website for a petition against the recent VED (car tax) changes and found one quite quickly. I agree wholehearted with it and the more I think about it these changes are totally disproprtionate. In being retrospectively applied they are a step too far, too quickly and greatly sour an initiative that is basically laudable about taking steps to change behaviour about the potential impact of man made CO2.

The link is here - only 4800 signatures so far.

http://petitions.pm.gov.uk/UNFAIR-VED/

I'd recommend people sign up as it may be able to make a difference. Some points to consider:

Taxation to affect the choices people make in the future on car CO2 emissions are a good idea when applied to new vehicles from now. This is because technologies are advancing and available models with much improved emissions are coming on to the market. However, owners of older cars (from 2001-2006) are now going to be severely penalised under the proposed changes to the VED tax (now upto more than £450/year). The main impact of this will be to massively increase tax on a wide range of the population with fairly ordinary cars. The fact this comes at a time of the credit crunch and when people are less likely to be able to change say their 2003 people carrier for a newer more efficient model is totally unfair and will really hit some people hard. This will be compounded by the fact that high CO2 2001-2006 cars will now be depreciating, making their owners feel poorer, and and make it harder to get a newer more efficient vehicle. This new policy is so poorly thought through - it should be changed.

[deejaygee]

I am actually 100% behind the new rules, as what it does is make us think immediately and not just when you come to change your car.

[scotw]

me too, something has to be done. I accept and sympathise about people who bought cars years ago and now find that they will have to pay more, thats not good. But, we need to do something and there will never be a good time to do it, so we just have to cope.

[Oli]

Says two people both running 320d's......I think you'd be thinking slightly differently if your drove a higher emmisions car that is suddenly going to cost a lot more to tax every year - Its just not a fair tax a sit stands


I agree but the new taxes should apply to new build cars only. People who have already spent their hard earned cash, or have finance on higher emmissions cars will find they will depreciate faster than they were, and could be seriously out of pocket come re-sale time - Just like when balloon payments came in originally in the 90's and had all been set too high.

just my tuppence.....

[deejaygee]

I disagree. My previous car was an IS200 which kicked out more rubbish than a 335d, I decided to change to my 320d last year due to the fuel ecomomy and low co2 emissions. It was a very concious decision indeed - when I come to change again I will probably (depending on size of family) go smaller.

So the answer to your post is no, it is not because I bought a 320d I had a valid reason.

[Oli]

So you think its fair that existing car owners get clobbered?

[deejaygee]

I think that deep down everybody that owns and who has bought within the last 5 years a bigger engined car knows that this was happening. It started with the company car taxation some 7-8 years ago.

So whilst I accept that people will be hit in the pocket I agree that it has to be done and it is not unfair. People have a choice, if you don't want to pay it get a greener car.

I made that choice last year fully aware of what was happening.

[Gibbo]

The whole thing stinks as if you own a higher emission car by default you do less mpg and hence pay more through fuel duty and vat.

The silly thing is that it becomes another headline figure and peoples buying habbits become irrational from it and hence the whole accelerated depreciation scenario. In the context of most peoples annual tax bill a £200 or £400 road tax is pretty irrelevant but it becomes visable and a talking point.

From the new car buyers perspective it could be an opportunity to buy performance cars with a bigger discount.

[squeezebm]

Originally Posted by Gibbo

The whole thing stinks as if you own a higher emission car by default you do less mpg and hence pay more through fuel duty and vat.

The silly thing is that it becomes another headline figure and peoples buying habbits become irrational from it and hence the whole accelerated depreciation scenario. In the context of most peoples annual tax bill a £200 or £400 road tax is pretty irrelevant but it becomes visable and a talking point.

From the new car buyers perspective it could be an opportunity to buy performance cars with a bigger discount.

+1 buy what you want

[F31-340i]

Interesting views from 320d owners! I wonder if they'll feel the same when their road tax is £500 a year and only a Mini Diesel will be 'affordable' to tax?

The issue about "it was always coming" is not entirely true. To my mind the Govt started by implying that cars after 2006 & >225g/CO2 would be clobbered, but not earlier cars / lower CO2. This inference has been totally reversed leaving all confused and when will it stop?

Its also not as if a few years of retrospective use is going to make any tangible difference, or more significantly its not as if the cars will all be scrapped to avoid them producing CO2 (scrapping of course would have a much bigger environmental impact, as does making new cars). Owners will just get ripped off for no tangible benefit. Also why should a relatively OK car just over 200g CO2 paid well over £300 when a car that just scrapes under 150g CO2 pays only £125 - the CO2 difference is not that great, especially when in reality the 150g car will need to be thrashed and hence produce much more CO2 in actual use than during its "Govt CO2 test"?

[NFS]

Originally Posted by deejaygee

I am actually 100% behind the new rules, as what it does is make us think immediately and not just when you come to change your car.

Originally Posted by scotw

me too, something has to be done. I accept and sympathise about people who bought cars years ago and now find that they will have to pay more, thats not good. But, we need to do something and there will never be a good time to do it, so we just have to cope.

I've signed the petition.

To Scot and deejaygee. The problems with the changes to VED are as follows:

1. It has no real environmental benefit:

The revenue raised will not be spent on environmental projects. Even if it led to a 50% reduction in the sales of higher band vehicles (which is highly unlikely) the reduction in CO2 emissions as a result would be incredibly small.

For example, the TOTAL impact of the company car tax changes is an annual reduction in UK CO2 emissions of 0.08%. This is entirely offset by ongoing increases in car ownership and mileage driven. This latest change will only effect the very top emission vehicles on UK roads. Assuming a normal distribution (very likely) the actual numbers involved will be VERY small compared to the total of vehicles involved.

2. It is economically insane.

The CO2 reduction could have been achieved at a fraction of the cost by targeting polluting industries. Polluters are currently forced to hit CO2 reduction tarriffs. Many are exceeding these and selling carbon credits - which are essentially permits to pollute. Again using the company car tax changes as an example, they resulted in annual CO2 emission reductions of 200,000 tonnes. Equivalent credits are being sold at £8 per tonne - so the 'value' of this saving is £1.6m. However, the net loss to the revenue as a result of the change (ie the cost to the taxpayer funded through other taxataion) is at least £160m per year. In effect this CO2 reduction is costing 100 times more than a similar reduction would cost polluting industry.

3. It is unfair and ineffective.

CO2 emissions per mile are irrelevant as indicators of annual emissions, unless the number of miles driven are taken into account.

The embodied carbon associated with the production of a new car is also ignored. If you do the maths it's quite easy to show that the carbon footprint of a used m3 owner can easily be less than that of a 'new' prius owner. But according to our government and this legislation the M3 owner is the bad guy .. why?

It's inffective because it doesn't taget polluters. It can ONLY be about PR and it plays on the naivety and lack of knowledge that the majority of the population have in respect of environmental issues.

My proposed alternative is as follows:

A £400 tax on the sale of every new vehicle - which is invested in carbon credits.

This would totally offset embodied CO2 from the production of the car plus the first 100,000 miles of emissions. It would also send out the right message. That it is better to run existing vehicles for longer rather than to buy new ones.

Now .. could those in favour of the increases in VED please explain why they are necessary and what they believe they will achieve?

[scotw]

I do think that the warning signs have been out for a while, I picked the 320D over the 325D based on Co2, before this came in.

Some valid points about older cars, but its not a massive hit.

As for fuel tax being enough or a flat tax, well I don't think that's enough. We want everyone to drive the most fuel/CO2 efficient car that they desire and a flat tax does not do that. Sure, if you drive 4,000 miles a year in a 4x4 you may emit less than someone who does 20,000 a year in a mini, but the point is, you could emit a lot less doing your 4,000 miles in a mini/5 series or other car. So, I think you need both, fuel tax (like its going anywhere anyway) and some type of efficiency tax.

Most people will still be able to afford the same cars as before, but this might tip a few people out of 2.5T cars into something more sensible.

I agree about the revenue raised being re-invested in projects, but I doubt we'll see that, the motorist has always been as easy target They could have had a much bigger impact by banning fluorescent bulbs and it would have been easier, but of course politicians don't think like normal people. I'm far from impressed by the progress made by this Government, but I'll take a little progress over none.

I'm not a tree-hugger, but we do need to do something and the car industry has not been playing its part, so sadly it needs forced.

[steve-p]

The first problem with VED is that we don't actually need it at all. We already have fuel duty which takes into account not only vehicle efficiency in some notional test, but real world vehicle efficiency AND mileage AND driving style AND congestion AND towing AND foreign vehicles. So why do we need another tax at all, when we already have a fairer one based on everything that actually affects the real CO2 generated, and not just some notional test figure which we all know if it's anything like the official MPG figure is unlikely to be representative of the real world in most cases?

An entirely fair system would be to reduce VED to an admin charge only (or abolish it altogether since MOT and insurance are now on a database and don't need the check which taxing a vehicle provides) and increase fuel duty by a few pence a litre to make up the shortfall. This is exactly what a government-sponsored report suggested several years ago, but it was too simple for Gordon Brown and he was frightened of fuel protests so he ignored it and invented this banding nonsense instead. Of course they did like the most recent government-sponsored report, because they could use it as an excuse to jack up the income from VED by £750 million, that's why the banding has been fiddled with in the last budget. If it's really about the environment, why wasn't it revenue neutral then?

The second problem is that any system using banding is disproportionate, but the new scheme is ridiculously so. For example a difference of 1 gram of CO2 from 225 to 226 for 2010 results in a 35% increase in tax. Why? The difference between 99 grams and 100 grams is infinite in percentage terms since there is no charge for 99 grams. Why? A 110 gram car costs £20, but a 220 gram car costs £310 or an increase of 1450%, yet if the 110 gram car does average mileage and the 220 gram car does half the average mileage, the emissions are exactly the same. In what way is any of this justifiably fair? People say that you need bands to simplify it, but I don't see why when the basis for the charge is an exact CO2 figure that they have derived from an EU test for each vehicle model. So why don't they just charge a fixed amount per gram and be done with it? Although the most sensible solution would just be the complete abolition of VED which is overcomplicated, discriminatory, expensive to administer and pointless when there is a simpler and fair alternative which requires no additional cost whatsoever to collect or administer.

[NFS]

Originally Posted by steve-p

In what way is any of this justifiably fair? People say that you need bands to simplify it, but I don't see why when the basis for the charge is an exact CO2 figure that they have derived from an EU test for each vehicle model. So why don't they just charge a fixed amount per gram and be done with it? Although the most sensible solution would just be the complete abolition of VED which is overcomplicated, discriminatory, expensive to administer and pointless when there is a simpler and fair alternative which requires no additional cost whatsoever to collect or administer.

What a stunningly brilliant suggestion ... simply make the VED equal to the CO2 emissions in £'s.



To scotw - as steve-p has pointed out in his post fuel taxation (which I support) is a much simpler and fairer way to apply an efficiency tax, because it allows us to be charged exactly in accordance with the amount we pollute.

On your other point, the car industry is a convenient target, because emissions from cars are probably the easiest for the general public to understand. However as I mentioned in my post, the environmental impact of increasing VED is negligable. A much greater impact can be achieved by targeting polluting industries who have done much less than the motor manufacturers, for example: aviation, aggregates, steel and power generation. All of which could have generated the savings resulting from the company car changes at 1/100th of the cost to the taxpayer of that measure.

The other issue (and bigger problem in motoring) is the environmental cost of the production of new cars. This equates to 50% of a vehicles total emissions over it's life. So pushing people to switch to new cars because they have better technology feeds the motor industry, but also increases CO2 emissions. A legal requirement for manufacturers to offset the emissions of each and every new vehicle sold would be a better measure. This might add £400 to the cost of a new BMW, but it would also make it carbon neutral for 100,000 miles.

Aviation particularly bothers me, emissions from planes are far more damaging than from road vehicles, yet instead of taxing aviation proportionally government subsidises it. So we can fly to europe for £20 and emit as much CO2 per passenger as my car does in a year.

[DaveC]

I love these great, intelligent and well expressed discussions this topic seems to encourage on this board, it's rather refreshing - so rarely see it anywhere else.

On the VED changes I tend to agree with most of what NfS says, in summary the changes are a great example of ill thought out, ineffective Greenwash.

Scotw touched on the subject of making people think about the car they chose and I wonder if this is the primary intention? If so it's still ineffective and too easy to interpret as just another tax.

Ideally in a world where the government actually knew how many cars were on the road and could enforce MoT and Insurance of all vehicles (you'd have thought after 100+ years of motoring this relatively simple task would have been achieved) a per vehicle taxation would be applied based on mileage and CO2. Try to suspend disbelief that the government could ever administer a sensible scheme and I'll explain what I'd do.

Take the total fuel tax revenue, divide it up by the approximate distribution of CO2 emissions and the approximate mileages covered - all this is approximate and only a start position, it can be refined in subsequent years. Now, from this we get rough figures that we can weight so that a low poluting car will pay say 11per mile tax and a high polluting car 40p per mile. The accountants and politicians can fiddle the figure as much as they want but you end up with a band set of bands covering all vehicles (cars & vans I'd exclude lorries as they probably need a different scheme).

Every mot your mileage is recorded (I guess I'd have to work with manufacturers to make it all but impossible to fiddle mileage) and from the number of miles you cover and the band you are in you get a tax bill for next year. You can pay it in installments or however but its a large number and you can easily see how much smaller your bill would have been if you'd driven a more economical car.

To make this work effectively I'd leave a reasonable portion of the fuel duty on the pump price so that people can still see a reason to drive economically. Oh and I guess we'd need yearly MoTs for new cars too but thats no great shakes.

There. Done. Its fair (but no more than the current pump tax is) but most importantly it gives people a real incentive to both improve their MPG and get their car down in the banding ratings rather than a spread out intangible one based on "Petrol is effing expensive".

[F31-340i]

Some valid points about older cars, but its not a massive hit.

OK - can you pick up my increases in tax then?

A family with say 3-4 year old mondeo and people carrier could be looking at going on for a £4-500 hike in VED. Good job there isn't a credit crunch on and such a family, who probably bought both cars 2nd hand, can afford it.....

Retrospective application is totally stupid and will further erode public confidence and add fuel to a potential economic turn down. Is that really good for the Govt, let alone the public? P*ss poor policy making, failing to take into account wider (even their own) issues.

[scotw]

OK - can you pick up my increases in tax then?

A family with say 3-4 year old mondeo and people carrier could be looking at going on for a £4-500 hike in VED. Good job there isn't a credit crunch on and such a family, who probably bought both cars 2nd hand, can afford it.....

Nope, but I'll pay mine, as I thought about this when I bought the car, as anyone who buys a car should.

I think its a fair point that applying the tax to older cars is a bit harsh, perhaps that should have been phased in, I dunno, but saying that new cars must pay so much and older cars don't misses the point, we want people to pay for their impact.

The other way of course is to hike up tax on fuel, but I think that hits the poorest worse, how could they then afford to run a car? At least this way, fuel stays (at a high level) but with sensible purchasing a family can keep the cost down. Lets face it, with the new cars here or on the way 120D, 123D etc you can have 200+bhp and pay low tax, its not that bad.

No scheme is going to keep everyone happy, someone will always loose out. We want to reduce CO2 and no one is going to like anything that hits their lifestyle. Most people are happy to talk, but refuse to do even the smallest thing to change their ways. So, we need to force change and that always results in unhappy people. NFS is totally right about aviation, we need to tackle that, but Governments are shying away from it and low cost airlines are not helping.

[F31-340i]

as I thought about this when I bought the car

Before the budget last month there was no indication that pre Mar 2006 cars would be clobbered. It appeared that 2006 on - >225g cars were to be clobbered, but thats OK as this was announced in advance & EVERYONE could plan for that.

If you bought your car more than a month ago, you can't have "thought about this when I bought the car", you're just lucky that you bought something that has largely escaped the current clobbering (for now). What about someone who bought a >200g but <225g car last year thinking it would stay around the £200/year mark as CLEARLY implied by extant Govt policy?

120ds are all very well but still lack the correct number of cylinders. More cheerfully the newer post Sep 07 330ds/335d are all under 180g at least so it will still be possible to run a decent BMW for some years without being too "VED-mugged".

[steve-p]

"Passenger cars currently generate 12% of total EU C02 emissions " - government report. "Homes in the UK are one of the leading culprits of CO2 emissions, making up around 28% of the national total and putting seemingly harmless homes on a par with industry emissions" - Energy Saving Trust. So why the big obsession with cars? Well because motorists are an easy and lucrative target as usual. I don't see people up in arms about other people owning bigger houses than they need, when this is far worse than owning a 4x4 which makes you public enemy number 1 nowadays. I don't see any initiatives to increase taxation on gas and electricity year on year for domestic use either, which ultimately could be more effective than the blinkered approach we see now.

The underlying issues are being completely devalued by the tax grabbing way they are being targeted and the political agenda of politicians like Ken Livingstone IMO, and there is a danger that people will get climate change fatigue. 10 years ago I was paying Future Forests to make sure my cars, house and flights were carbon neutral. I don't anymore since a couple of years ago. Once the mass hysteria which has overtaken politicians and the media started I find it increasingly hard to care as much frankly. With two new coal-fired power stations a week opening in China, and mass motorisation of the population occurring in India, the idea that paying a lot more tax just for the sake of it is going to save the planet becomes less and less convincing.

[NFS]

Originally Posted by scotw

No scheme is going to keep everyone happy, someone will always loose out. We want to reduce CO2 and no one is going to like anything that hits their lifestyle.

The problem is that the VED changes will definitely not reduce CO2 emissions. To quote steve-p:

Originally Posted by steve-p

"Passenger cars currently generate 12% of total EU C02 emissions "

The entire impact of the company car tax reform is to reduce CO2 emissions from cars by 2%. In terms of UK emissions that's a reduction of 2% of 12% (i.e 0.24%) pretty unimpressive as it costs us £150m per year in lost revenue, but only has a market value of £1.6m

VED changes will have much less impact. Getting people out of the highest emitting cars will only affect the very tip of the 'normal distrubution' of car emissions. This will have very little effect on the mean CO2 figures per car and on the total CO2 emissions from vehicles. Even if people change their cars they are unlikely to drop to the lowest VED band. They will just try to save a few g/km and drop onto the band below.

An individual buying a new car in the band below might reduce emissions by 10g/km. Assuming he drives an 'average' 16,000 km a year that would save 160,000g or 160kg or 0.16tonnes of CO2. This has a market value of £1.28.

Unfortunately, the CO2 emissions associated with the production of that car are likely to be significantly greater.

As a result I would expect that the changes to VED will increase CO2 emissions overall.

I have no difficulty paying an environmental tax if it is effective and well targeted. The fuel tax falls into this category as far as I can see, but the changes in VED do not.

[scotw]

Originally Posted by ///ajd

Before the budget last month there was no indication that pre Mar 2006 cars would be clobbered. It appeared that 2006 on - >225g cars were to be clobbered, but thats OK as this was announced in advance & EVERYONE could plan for that.

If you bought your car more than a month ago, you can't have "thought about this when I bought the car", you're just lucky that you bought something that has largely escaped the current clobbering (for now). What about someone who bought a >200g but <225g car last year thinking it would stay around the £200/year mark as CLEARLY implied by extant Govt policy?

120ds are all very well but still lack the correct number of cylinders. More cheerfully the newer post Sep 07 330ds/335d are all under 180g at least so it will still be possible to run a decent BMW for some years without being too "VED-mugged".

Yes, I did think about it - I thought about the impact my car choice would have and also I considered that in time higher emission cars would be less desirable. It was already happening as fuel prices stay high, people want more efficient cars. So, yes I did think about it, not about this particular rise, but it impacted my choice a lot.

Lack the correct number of cylinders - that's you're reason that you should not choose a more efficient car? Not safety, practicality, image, performance, residuals, quality, but the number of cylinders? I refer you to my comment about how people are totally unwilling to make even the smallest change in their lifestyle in order to do something about the problem.

No wonder other countries are hacked off at us if that's the attitude that people have. Number of cylinders has about a zero impact on my life, so yes I think that's a small compromise to make.

NFS, as always you make good points and sense, I'm not convinced that this will make much of a difference, but we need to start somewhere.

[DaveC]

Originally Posted by scotw

NFS, as always you make good points and sense, I'm not convinced that this will make much of a difference, but we need to start somewhere.

Starting in the wrong place with the wrong thing is often worse than not starting at all.