Election: Lib dems would raise on average by £25 a year

If the Liberal Democrats gain power Car tax will increase on average by £25 a year by 2017/18, with drivers of gas guzzlers facing even higher bills!

Figures released by the party in a pre-manifesto briefing show an extra £485 million will be raised by the rebanding in 2016/17 and £850
million in 2017/18.

At a central London press conference, Mr Clegg rejected the assertion that the tax hike amounted to a new "war on motorists", insisting the measure was to maintain the "status quo" on the revenue raised.

He said: "It's a revenue retention measure - we simply want to maintain the same amount of money from the overall vehicle duty system as we set out in 2010.

"This is just to make sure as the system shifts around because people are buying lower emission vehicles, we still generate the same revenue."

Under current VED rates, petrol and diesel cars which emit less than 100g of carbon dioxide (CO2) per kilometre pay no tax, while the dirtiest vehicles with emissions of more than 255g per kilometre pay £505.

An aide to the Lib Dem leader said: "In 2010 we put out a projection of how much we thought we would get from VED.

"The take-up of fuel-efficient cars has been faster than the Government expected, which means that the overall revenue has fallen, so that is restoring it.

"What we have said we will do, this is exactly as has been done before, is we will work with the automotive industry to work out the next setting and banding, continuing to incentivise lower carbon-emitting cars."

The source said: "Higher emitting cars will pay a little bit more to make sure we get the revenue we want."

The exact impact on individual models will be the subject of a consultation with the motor industry.

But the source said: "There are around 32 million cars on UK roads. Under the revenue raised by 2017/18 that will be an average of an increase by £25 a year.

"But of course that would depend on your carbon emissions."

Source : home.bt.com