Families will be clobbered by London mayor's new CO2 tax

Changes to the congestion charge will not significantly cut CO2, nor will they drive down traffic in central London. However, families who need larger cars could face bills of up to £6,000 a year. SMMT has re-stated these concerns today, following the mayor of London's press briefing this morning.

From 27 October, cars that emit more than 225 g/km CO2 will pay £25 to enter the central London charging zone. Band A and B cars, those that emit less than 120 g/km, will be eligible for a 100 per cent discount. The mayor did not make clear how long discounts would apply. Drivers of cars within bands C to F will pay the current £8 a day charge.

The scheme has been billed as a gas-guzzler tax. However, families with some variants of popular cars like the Ford Mondeo, Renault Espace or Vauxhall Vectra will be forced to pay £25 a day just to drive within the zone.

'This is totally disproportionate and does not present a consistent signal to consumers,' said SMMT chief executive Paul Everitt. 'The mayor has made it clear that charges will be varied in future and has not clarified the period in which discounts will apply.

'We can be confident that this means higher charges and the gradual erosion of discounts for band A and B cars. I shall therefore be writing to the mayor seeking a three-year application period before any further changes are made to the scheme.'

TfL figures suggest a CO2 saving of up to 8,100 tonnes under the changes. That compares to total ground-based transport emissions in London of 9.7 million tonnes. In other words, the maximum benefit for the capital would be a CO2 reduction of just 0.084 per cent.

This compares to average new car CO2 emissions which have come down by 13 per cent in a decade, saving an estimated million tonnes of CO2 each year. The biggest improvements have come in the 4x4 and MPV segments, down 20 and 24 per cent respectively.

SMMT supports the mayor's stated aim to reduce congestion. However, independent reports suggest that changes could encourage between 4-10,000 additional cars onto central London roads. That could mean more congestion and delays for drivers within the zone.