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MPs gear up for car tax challenge Duty change 'will penalise poor'
(about 2 hours later)
MPs are to make a challenge later to controversial plans to increase vehicle excise duty on the most polluting cars. Moves to raise vehicle excise duty on the most polluting cars are "unfair, ineffective and will make life hard" for a number of people, the Tories say.
The Tories say 2.3 million families will pay between £100 and £245 more on each car they already own as changes apply to cars registered since 2001. They claim 2.3 million families will pay between £100 and £245 more on each car they already own as changes apply to cars registered since 2001.
A Commons motion calling for higher rates to apply only to new cars has also been signed by 49 Labour MPs.A Commons motion calling for higher rates to apply only to new cars has also been signed by 49 Labour MPs.
The challenge comes as lorry drivers prepare to stage a mass protest and lobby of MPs over fuel duty rates. A vote on the issue is expected to take place at about 1800 BST.
MPs are debating the Finance Bill, which enacts the Budget, for a second day. 'Hitting the low paid'
On Wednesday, Philip Hammond, the Conservative's shadow chief secretary to the Treasury, opened the debate arguing that "Britain's taxes are too high and our tax system is too complicated". Under the government plans, owners of some of the oldest cars could face a tax rise of around £200 - a move which the Conservatives and many Labour MPs say will hit poorer drivers the hardest.
He called for the government to make a "long term commitment" to making the tax system transparent, simple and certain. However, the Treasury argues that the changes, designed to cut poillution from cars, will mean two thirds of drivers will pay less or no more.
'Retrospective effect' What kind of policy creates a situation where the owner of new Porsche will face a smaller tax increase than a family driving an older car? Justine GreeningShadow Treasury Minister
During Tuesday's debate the focus was on the decision to abolish the 10p tax rate. The government headed off a potential revolt by promising, in the pre-Budget report, to deal with the 1.1 million people who are still worse off. But shadow Treasury minister Justine Greening says the tax rise is likely to hit those least able to afford it.
Later on Wednesday MPs will debate the controversial vehicle excise duty plans, which the Treasury says will mean 66% of drivers will pay less or no more. They will vote at about 1800 BST. "The people who are being effected are people with older cars, they are people with family cars, they are people on low incomes and they are people who can't afford to upgrade to a less polluting car," she told MPs.
"What kind of policy creates a situation where the owner of a new Porsche will face a smaller tax increase than a family driving an older car?"
Correct principle?
She accused Chancellor Alistair Darling of not having the "decency" to make public the retrospective element of the road tax, by instead "burying it in the small print".
She claimed it would have "no benefit to the environment" and the retrospective part of it would "penalise people" who made decisions about the cars they bought up to seven years ago.
FROM THE TODAY PROGRAMME Hauliers head to fuel price demoCar tax rates for 2009FROM THE TODAY PROGRAMME Hauliers head to fuel price demoCar tax rates for 2009
Under the plans, owners of some of the oldest cars could face a tax rise of around £200 - a move which the Conservatives and many Labour MPs say will hit poorer drivers the hardest.
The Conservatives have put forward an amendment to the Finance Bill to stop the tax applying to cars bought before March - when it was announced in the Budget.The Conservatives have put forward an amendment to the Finance Bill to stop the tax applying to cars bought before March - when it was announced in the Budget.
And a Labour MP's early day motion - asking the government to reconsider the "retrospective effect" of the tax - has been signed by 69 MPs, 49 of them Labour.And a Labour MP's early day motion - asking the government to reconsider the "retrospective effect" of the tax - has been signed by 69 MPs, 49 of them Labour.
'Fundamentally unfair'
Shadow Treasury minister Justine Greening told the BBC: "Green taxes can only work at changing behaviour in the future and what the government did in its Budget this year was announce it was going to put green taxes on people who'd already bought cars up to several years ago.
"We think that's fundamentally unfair, Labour MPs have also signed an Early Day Motion agreeing with that. What we're trying to do today in Parliament is fix that."
FROM THE TODAY PROGRAMME
Greenpeace executive director John Sauven has said the plan to bring in higher taxes on cars which people have already bought "gives green taxes a bad name". He believes it should apply just to new cars, rather than forcing people to pay for a choice made in the past.Greenpeace executive director John Sauven has said the plan to bring in higher taxes on cars which people have already bought "gives green taxes a bad name". He believes it should apply just to new cars, rather than forcing people to pay for a choice made in the past.
But Tim Yeo, the Conservative chairman of the Commons Environmental Audit Committee, said the principle was correct.But Tim Yeo, the Conservative chairman of the Commons Environmental Audit Committee, said the principle was correct.
His committee will hold a one-off session to examine the car tax proposals on Wednesday and he said MPs would debate whether the new rates were being introduced too quickly. 'Difficult decisions'
Climate change He told BBC Radio 4's Today programme: "Three times as many people buy a second-hand car as buy a new car so if we are going to use bigger differentials in vehicle excise duty to influence car purchasing decisions they have to apply to existing second-hand cars as well as new ones."
But he told BBC Radio 4's Today programme: "Three times as many people buy a second-hand car as buy a new car so if we are going to use bigger differentials in vehicle excise duty to influence car purchasing decisions they have to apply to existing second-hand cars as well as new ones."
He urged the government to stick to its environmental agenda, saying any attempt to give motorists an "easier ride" on green taxes would be "catastrophic" for the fight against climate change.He urged the government to stick to its environmental agenda, saying any attempt to give motorists an "easier ride" on green taxes would be "catastrophic" for the fight against climate change.
The Treasury says people on low incomes are more likely to drive cars that are in the lowest car tax bands and will pay less or the same as they do now. The Treasury says people on low incomes are more likely to drive cars which are in the lowest car tax bands and will pay less or the same as they do now.
At a briefing earlier, the prime minister's spokesman appeared to dismiss the idea of a climb-down on the car tax measures. At the regular morning press briefing, the prime minister's spokesman appeared to dismiss the idea of a climb-down on the car tax measures.
FROM THE TODAY PROGRAMME
He said the policy was "set out by the chancellor in the Budget" and that remained the government's position.He said the policy was "set out by the chancellor in the Budget" and that remained the government's position.
He said the government acknowledged that "difficult decisions" had to be taken if you are serious about the green agenda, and that the proposals would save 1.3 million tonnes of CO2 by 2020.He said the government acknowledged that "difficult decisions" had to be taken if you are serious about the green agenda, and that the proposals would save 1.3 million tonnes of CO2 by 2020.
During Tuesday's debate the focus was on the decision to abolish the 10p tax rate. The government headed off a potential revolt by promising, in the pre-Budget report, to deal with the 1.1 million people who are still worse off.
Are you a car owner? How will the proposed raise to vehicle excise duty affect you? Send us your comments using the form below:Are you a car owner? How will the proposed raise to vehicle excise duty affect you? Send us your comments using the form below:
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