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Duty change 'will penalise poor' MPs preparing to vote on car tax
(about 1 hour later)
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.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.
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.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.
A vote on the issue is expected to take place at about 1800 BST.A vote on the issue is expected to take place at about 1800 BST.
'Hitting the low paid''Hitting the low paid'
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.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.
However, the Treasury argues that the changes, designed to cut pollution from cars, will mean two thirds of drivers will pay less or no more.However, the Treasury argues that the changes, designed to cut pollution from cars, will mean two thirds of drivers will pay less or no more.
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 MinisterWhat 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
But shadow Treasury minister Justine Greening says the tax rise is likely to hit those least able to afford it.But shadow Treasury minister Justine Greening says the tax rise is likely to hit those least able to afford it.
"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."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?""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?"
'Penalise people''Penalise people'
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 would "penalise people" who made decisions about the cars they bought up to seven years ago.
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
And she said the Treasury's take from the rising costs of VED would increase from £1.9bn in 2006 to £4.4bn in 2010. She also said the Treasury's take from the rising costs of car tax would increase from £1.9bn in 2006 to £4.4bn in 2010, but without helping the environment.
"One would have hoped that a several billion pound increase in tax would lead to some pretty impressive vehicle emission savings," she said.
"But actually that's not the case. The argument that these changes will help the environment is simply not true."
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 Labour MP Ronnie Campbell'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.
Climate changeClimate change
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. Lib Dem Treasury spokesman Jeremy Browne said his party agreed with having variable car tax rates - and said they would make the differences greater to encourage consumers to buy more fuel efficient cars.
But he said he would be backing the Tories because he did not agree with the retrospective element of the plans.
This is a very, very heavy tax on a second hand car, which are bought in the main by working class people because they cannot afford to buy new cars Ronnie CampbellLabour MP
"People with older cars are going to be hit by the retrospective element of these proposals and they can't easily sell these cars," he said.
Labour's Ronnie Campbell said he would be backing the government "with a heavy heart" in the hope it would come back in the autumn with an alternative proposal.
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.
'Difficult decisions'
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 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 which 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 the regular morning press briefing, 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. The government acknowledged that "difficult decisions" had to be taken if you are serious about the green agenda, and that the proposals would save 1.3m 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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