Drivers of the most-polluting cars have been spared from serious increases in the amounts of vehicle excise duty (VED) they will pay.
Speculation had built that the Chancellor, Alistair Darling, would delay the implementation of the VED system. But a new 13-band system will be introduced next April, although any increase in VED for any car will be limited to £5 to help out motorists.
And in 2010, when different rates were scheduled to be introduced to ensure the owners of more-polluting cars paid more, any VED increase will be limited to £30.
But those investing in a less-polluting car will only see their bill fall by a maximum of £30.
Under the original proposed system, the owners of the 1.1 million high-polluting cars bought between 2001 and 2006 would have seen the duty they pay increase by more than £200 a year from the current level, from £210 to £430.
Driving groups gave a cautious welcome to the cap on a road tax increase, but maintained that VED should be scrapped, as it was an unfair system.
"These limits are only for a year, which means motorists could still be clobbered with bigger increases down the road," said Nigel Humphries of the Association of British Drivers. "VED is an unfair system which seriously damages the value of cars.
"A much fairer system would be to put up duty on fuel, so that those who drive more, pay more."
But motorists hoping that they would benefit from reduced petrol prices after the reduction in VAT were disappointed. Fuel duty has been increased by 2p a litre to offset the 2.5 per cent fall in VAT from Monday.
The fuel duty rise has angered road hauliers. Freight Transport Association policy director James Hookham said the chancellor had shown a "cynical disregard" for the industry.
Roger King, the chief executive of the Road Haulage Association, described it as "a smack in the teeth for UK hauliers".Reuse content