Following last week's enormous hikes in VED suggested by a Government committee, the Liberal Democrat party has launched its own policy that aims to "tackle climate change by taxing pollution".

The Government committee had proposed highest polluting cars attract a £1800 tax disc, that caused widespread outcry. The Lib Dem's goes one step further with a costly system of taxation should the party be elected. The political party called for even steeper rises in VED rates that would see cars like a diesel Toyota Rav4 attract a £2000 annual VED.

The Lib Dems estimate re-organised VED rates will not only help influence car-buying habits away from higher polluters, but also raise an extra £750m a year.

The party has also committed to a policy of raising fuel duty in line with inflation, claiming Gordon's Brown's failure to index link fuel duty cost the Exchequer £625m.

Road charging also sat at the top of the agenda, with the opposition party openly supporting congestion charging and future experiments with controversial pay-as-you drive schemes. The Lib Dems suggested road charging of the future might replace fuel duty in whole or part.

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