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Owners of 4x4 penalised but 'little done' to reduce car usage

Chancellor Gordon Brown used what will likely be his last Budget to greatly increase the tax on gas-guzzling 4x4s and raise the price of petrol – but was accused by analysts of not doing enough to change people's driving habits.

The changes in vehicle excise duty to favour those with environmentally friendly vehicles had been much anticipated and was welcomed by green campaigners but criticised as misdirected by motoring groups such as the AA.

Mr Brown has also ditched the discrepancy in rates between diesel and petrol vehicles, which saw the latter pay less, in favour of a flat rate for each band.

The new regime means those who drive so-called top-of-therange gas-guzzlers, such as diesel BMW X3s, will see their tax bill rise from £215 a year to £300 immediately, followed by another £100 increase to £400 next year.

Owners of band B cars, such as Honda Civic Hybrids, which have lower carbon emissions, have been rewarded with a cut from £50, for diesel drivers, to £35.

But Jillian Anable, a research fellow at the Robert Gordon University's Centre for Transport Policy in Aberdeen, said she was distinctly underwhelmed by Mr Brown's efforts to influence car buying and particularly concerned that the "Budget does nothing for car use".

She said: "Carbon emissions from transport don't only rely on what cars you drive, it's how much you drive them. In fact, that's more important.

"There isn't anything in the Budget to try and influence how much people actually drive.

"That's a reflection of Government policy. They are not really trying to influence car use, it's more car ownership."

Ms Anable said the most effective way to change how motorists used their vehicles would be by increasing fuel prices to a level beyond the 2p Mr Brown had selected, effective from October.

Because the cost of petrol had an impact on drivers every time they filled up, she said, it was more effective than a yearly or six-monthly tax. Ms Anable said the reason this was not done was because of the Government's fear of fuel protests in the wake of the protests in 2000.

However, she conceded the super tax on the vehicles with the highest carbon emissions was likely to have some effect.

"The main difference is there's been a slowing down in uptake of the highest-polluting cars," she said. "The problem is there is still a huge uptake of cars in the medium bracket and when people buy a medium family car, they have a huge choice in the difference between the best and worst-performing in terms of carbon emissions."

Ms Anable also praised the decision to charge the same tax rates for diesel and petrol cars as, while the former is better for carbon emissions, it was worse for local air pollution.

RAC Foundation executive director Edmund King said motorists would breathe a sigh of relief that there would be no fuel tax rise for six months and added that the tax reforms gave a green light to cleaner motoring.

The AA said the chancellor had "joined the ranks of taxguzzling politicians who will, however inadvertently, use road tax band G as a tool to punish large families whose circumstances require them to have larger vehicles to function".

Mr Brown was more reticent when it came to airline customers. Last year, he doubled the rate of air passenger duty, but this time round he said he had rejected the idea of putting VAT on airline tickets, claiming it would make little difference.