Car tax changes to leave 9 million worse off

By Michael Holden

LONDON (Reuters) - The drivers of nine million cars, nearly half of all those in Britain, will be worse off under government plans to raise vehicle duty for polluting cars, according to figures from the Treasury.

The news that so many hard-pressed drivers of older and second-hand cars will be hit has raised the spectre of another revolt by Labour MPs after the furore over the abolition of the lowest income tax band.

Projected figures released by minister Angela Eagle revealed that owners of 43 percent of Britain's 22 million cars would be worse off under the proposals, with fewer than one in five seeing their tax bill fall.

The Conservatives said the news contradicted Prime Minister Gordon Brown's comment in parliament that the majority of motorists would benefit from the changes.

Currently, cars bought after March 2001 and registered before March 2006 are liable for a maximum of 210 pounds in car tax.

Under the government's plans, from 2010 the most polluting cars would pay 455 pounds, while those with the least CO2 emissions would pay less than now.

Eagle said the move was a bid "to strengthen the environmental incentive to develop and purchase fuel-efficient cars".

But the move has provoked criticism as the changes would affect people who had already bought their cars and also include vehicles such as the popular people-carriers that are not regarded as "gas guzzlers".