Drivers are to be hit with a raft of new taxes to raise an extra £2billion over the next three years.

Figures from the RAC Foundation suggest that the government is looking to hit the already stretched UK motorist with changes to Vehicle Excise duty, worth an extra £1.2billion, as well as changes to company car tax allowances and around £550million from the removal of the fuel duty differential.  The fuel duty differential is a 20 pence per litre tax break for biodiesel, in order to encourage it's production.  As a result a small number of biodiesel plants are now operating, recycling oil and turning it into biodiesel. 

The amount motorists contribute to the coffers of the chancellor has increased steadily since the mid '70s.  In 1975 income from motorists was £11.6billion in today's prices, which was broadly equal to spending on the road network. Today, on the other hand, the government takes four times as much from the motorist (£31.2billion), as it spends on the roads (£8.2billion).  With spending lower in real terms than the mid seventies the tax burden is over four and a half times higher - equivalent to an extra £23billion.

The proposed increase of 2p on the cost of a litre of fuel may well be shelved in a bid appease furious drivers, but there will be big increases regardless.  Although with the current rises in fuel costs you can easily save 2p per litre by being selective about where you purchase your fuel.

Earlier this week the government saw off a challenge to the proposed changes to Vehicle Excise duty by promising a review in the autumn pre-budget report.  The proposed changes to the tax system were thrown into disarray when the government made the decision to backdate the tax to any car purchased since march 2001, thus making many old, inefficient cars prohibitively expensive to run and virtually worthless on the used market.

Government spokespeople have assured us that the reasons for the changes are to reduce carbon emissions in an attempt to reduce the effects of climate change.  This assertion is challenged by the RAC Foundation's analysis of figures in the Government's Stern Report, which show that there is no environmental case for raising motoring taxes. Indeed, it shows that road users are the only energy users already covering their carbon costs.

Stephen Glaister, Director of the RAC Foundation, said: "The Chancellor may pull a populist rabbit out of the hat by scrapping the October 2p rise, but this will be a drop in the ocean compared to his plans to take an extra £2 billion from the road user's pockets by 2011."

The Society of Motor Manufacturers and Traders have also urged for the government to comission further research before making any changes.  “SMMT recognises that VED is an important signal but it is not the main driver for change,” said Paul Everitt, SMMT chief executive. “We fear motorists will see the first year rate as a way of raising cash rather than reducing carbon.”

The SMMT have stated that there should be a full and proper analysis of VED to measure its contribution in reducing emissions.  They recommend that the government is both proportionate in their use of VED and transparent with it's aims.  It is clear that VED should not be used as a crude from of revenue generation for the treasury.

What seems to be really happening is that the current government feels that the UK motorist is something of a cash cow that can be used to shoulder increasingly high proportions of the UK tax burden.  All this while they have hauliers blocking off the capital city in a go slow protest at the high price of fuel.  And that's not even looking at the money raised through parking and speeding fines...