Tax hikes 'will cost drivers £2bn'

Motorists are to face increased costs thanks to Government plans to raise about £2 billion in road taxes before 2011, the RAC Foundation has warned.

The foundation said the move would cost drivers four times more than would be saved by the dropping of the proposed October 2p fuel duty increase. It is urging the Treasury to carry out a review of motoring taxation, taking account of the impact of sustained high oil prices on family spending, and the impact of reduced mobility on the UK economy as a whole.

In 2009, more than 60% of additional revenues from this year's Budget will come from motoring taxes, while in 2010, more than 90% of additional revenues will come from motoring taxes, the foundation said. These changes are described in the Budget as measures "protecting the environment", but the RAC said there was no environmental case for raising such taxes.

RAC director Stephen Glaister 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."

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