Motorists have had a somewhat lucky escape as chancellor, Alistair Darling pulled plans to hit them with backdated road taxes of up to £245 to head off a Labour revolt next week. On the side, Darling assured Labour backbenchers, 48 of whom have signed a motion demanding a rethink, that he will ‘fix’ the problem of other increases in his autumn pre-Budget report.

This decision would signal yet another U-turn following the 10p tax embarrassment, which the Government have already had to endure. Moreover, despite this temporary release, as the months draw on, by next year motorists will find that the cost of running their vehicle is going to increase, in terms of car insurance, maintenance and tax. This is due to an increasingly environmentally-friendly approach by the Government to reduce greenhouse gas emissions and depending on the amount emitted by a vehicle, the driver may find it causing a huge dent in their outgoings. Under proposals, it is thought that 18 million motorists will face higher costs in running their cars by 2010 and it is these reforms that have sparked anger within the Commons.

The backbenchers and rebel MPs have staged their motion for a rethink as they are not on board with the fact that the measure is being presented as an environmental fait-au-complit and that the increases will apply retrospectively to all vehicles bought between 2001 and 2006. Part of the vehicle exise duty shake-up will be debated in the Commons, which has led to concerns that rebels will use it as an opportunity to raise their opposition to the reforms. However, due to the fact that the implication is that Darling will be forced to discuss the policy in private meetings, this seems to have appeased them for the moment.

According to treasury sources, Mr Darling is not making any public announcements nor is he ignoring the MPs anxieties, as he is aware of how important it is to keep the peace among them and he has made it clear that he understands their stance on the reforms, and the concerns they undoubtedly have. Under the scheme, cars will be divided into 13 groups depending on their carbon dioxide emissions. Those cars in the top band with emissions of more than 225 grams of CO2 per kilometre will be charged £440 for road tax each year, and this amount will increase annually.

Currently, cars that have been purchased earlier than 2006 are exempt from the top rate and will pay a maximum of £210 for road tax, however, once Mr Darling’s proposals take effect there will be no repreive for any motorist. Moreover, popular family models such as the Vauxhall Zafira, Renault Espace and VW Passat will attract considerably more tax regardless of when they were bought. This in turn leads to dealers reducing the price of cars in order to make a sale, the market will flounder and many vehicles, although only five or six years old, will become worthless. The rebel MPs are calling for the environmentally retrospective aspect to be removed from the reforms as they feel it is unethical due to the fact that motorists may have bought their cars over nine years ago before the real climate crisis truly arrived and our eco-consciousness was raised. Essentially, the increase in road tax in relation to CO2 emissions will lead to the cost of taxing the vehicle being far higher than the original price paid for the vehicle itself.