It's been reported today that the Lib dems want to introduce quite significant sliding scales of road tax dependent on emissions. The result is going to be that an oridinary family saloon like a Ford Mondeo will cost around £800 per year to tax. The argument being put forward is that this sliding scale will encourage people to drive cleaner cars. The problem is though, the cleaner the car is, usually also means the smaller the car is. Try having a family four and a Toyota Aygo.
There are though, I think, some unintended consequences of such a policy. What impact will it have on the second car market and car disposal market for a start? After all, a low earning large family, that requires a larger car is most likely going to buy a second hand one. By nature a second hand car will be less green than a newer one and will have the added impact of carrying a large tax tag.
If a car is in say the £1,500 tax bracket, what happens to it when it's market value reaches £1,500? This is a classic Lib Dem policy that sounds great in theory but could actually have disasterous impact in practice. There's not only the punishment for families but there is the added impact on a second hand car market which is the only place some people can even afford to buy a car.