The Government is today being urged to reform Vehicle Excise Duty (VED) and add a new premium tax covering gas guzzling vehicles to encourage more drivers to opt for more fuel efficient cars.

The Energy Saving Trust (EST) is calling on the Government to mark World Environment Day (June 5) by targeting drivers of the most inefficient vehicles by:

  • Increasing the differentials between VED bands, with the 'greenest' Band A cars paying no VED or receiving a tax bonus under a 'Feebate' scheme. As an example recent MORI research for the Department for Transport revealed that a differential of up to £150 between the bands would persuade over half (55%) of new private car buyers to switch to a lower emission car.
  • Setting a new top Band G for vehicles with higher than 210 g/km CO2 emissions, such as large saloons or 4x4s. Almost half the sales currently falling into the top Band F would fall into this new band.

    Philip Sellwood, chief executive of EST, says: "It's no surprise that the UK still has one of the highest average CO2 figures for new vehicle sales in the EU when our Government is offering drivers little or no real incentives to buy more fuel efficient vehicles.

    "In fact, the maximum VED differential between the best and worst vehicles is currently just £115. And over a quarter of new cars for sale in the UK actually fall into the highest band F (185g/km CO2) so there's no financial benefit for those drivers who opt for more efficient larger vehicles over the high-emitting 4x4s or performance vehicles.

    "If the Government is serious about cutting the UK's CO2 emissions then it must make driving efficient cars a more financially beneficial prospect."