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BIRD'S EYE VIEW: Darling makes us pay King's ransom

Date: 25 March 2008

Guy Bird is our editor-at-large and political columnist

It is a sure reflection of the political climate that even in uncertain economic times, when most experts urged Alistair Darling to unveil a cautious Budget, his final proposals to tax high-emitting cars were anything but.

VED - or road tax - will rocket to £950 for the first year of any new car that emits 255g/km of CO2 or more from 2010. That's a whopping £650 hike over the current £300, but the fact that Darling is confident of little backlash says much about the general public's seeming willingness to fall out of love with high-energy use vehicles.

It also shows Darling is nothing if not an advocate of part two of the King Review of low carbon cars, subtitled "recommendations for action".

The report says one of the easiest ways to make the 60-80% CO2 reductions King says the UK needs to stabilise climate change by 2050 is by choosing more efficient vehicles - encouraged by tax incentives among other things. Darling's massive VED hikes directly correlate with such thinking.

There are many other proposals within the 114-page report that should make interesting fleet reading and could be Government policy soon. They range from suggesting public sector car fleets match the Government's pledge to get to a 130g/km CO2 average by 2010-11, an investigation into moving the existing tailpipe CO2 emissions measurement to one reflecting the lifecycle emissions of manufacture and disposal too, and perhaps most psychologically interesting of all, a new colour-coded tax disc scheme that would display to the world how green your car is.

“A red Porsche with a matching tax disc may not seem such a coordinated style statement after all”

Guy Bird

King suggests a traffic-light style system where cars emitting less than 120g/km of CO2 (VED bands A or B) get to wear a green tax disc, those between 121-185g/km (bands C to E) can rock an amber colour while those spewing out 186g/km or more (F, G and the new 255g/km-plus M band) will be forced to wear red at all times. Hang your heads.

King reckons the public shame of a rouge badge could lead over time to real changes in consumer behaviour in a way current eco taxes by themselves don't. It would also make it clearer which cars were really green-focused. For instance, all existing Lexus hybrids - except the GS450h by a whisker - would fall into the 'red equals bad' category under such a scheme.

Apart from the 'name and shame' aspect to the colour-coded tax disc, King says the scheme would also allow local authorities to easily enforce future free or dedicated parking for low emission vehicles.

If such a scheme does makes Government policy, owning a red Porsche with a matching tax disc may not seem such a coordinated style statement after all.