Jenny Percival 

Proposed duty on high-pollution cars ‘to be reviewed’

Ministers have agreed to look again at controversial plans to increase road tax on high-polluting cars, a Labour MP opposed to the scheme said tonight
  
  

Porsche logo
Porsche drivers could face lower duty than owners of old family cars. Photograph: Roberto Schmidt/AFP/Getty Photograph: ROBERTO SCHMIDT/AFP

Ministers have agreed to look again at controversial plans to increase road tax on high-polluting cars, a Labour MP opposed to the scheme said tonight.

Ronnie Campbell, the leader of a campaign against the proposed changes, said he had been "given assurances through the whip's office" that the measure would be reviewed.

He told BBC Radio 4's PM programme that since the rise was not due to come into effect until next April, the chancellor would have time to reconsider it and withdraw or amend it in this autumn's pre-budget report.

"It's not going to be implemented till April, so if they don't do anything in the next few months, particularly in October, then we will look at it again," he warned.

Campbell is one of around 50 Labour MPs who have signed a parliamentary motion urging ministers not to backdate the tax, which applies retrospectively to vehicles bought since 2001.

A vote on the Conservatives' amendment to stop the government backdating its proposed road tax increase to 2001 was defeated in the Commons tonight, by 303 votes to 240, a government majority of 63.

Treasury minister Angela Eagle described the Tories' proposal as "undesirable, unworkable and downright peculiar". But she told would-be Labour rebels that she had been listening closely to their views and ministers were examining ideas put forward to help hard-pressed motorists and hauliers.

Earlier, in a Commons debate, Campbell likened the change to the abolition of the 10p tax band because both were "a tax on the poor". He said the government had a chance to scrap it before it turned into "another fiasco".

He said: "It's a heavy tax on working people that need the car to get to work because our transport system is not that good. It's a retrospective tax on working people."

But he added: "I'm going to vote with the government with a heavy heart with the hope that people will come back with something that will give the working class people of this country a bit of a break."

The Conservatives, backed by the Liberal Democrats, are also pressing for a rethink. An amendment to the finance bill tabled by the Tories would stop the tax being backdated.

Shadow treasury minister Justine Greening told MPs that she agreed with Campbell and other Labour MPs that the tax was "unfair and ineffective".

The consequences of the VED change would be "more dramatic" than the impact of the abolition of the 10p tax band, with 2.3 million people experiencing tax rises of up to £245, she said.

The plans would create a situation where the owner of a new Porsche would face a smaller tax increase than a family driving an older family car, said Greening, adding: "It is completely unacceptable that these changes to VED should impact worse on those with the lowest income."

But a Conservative party split on the issue emerged when a senior backbencher, Tim Yeo, said it was important for the government to press ahead with its plans to increase taxes on polluting vehicles.

Yeo, chairman of the Commons environmental audit committee, warned that giving motorists an "easier ride" on green taxes would be "catastrophic" for the fight against climate change.

He said the debate was whether the proposed tax hike was being introduced too quickly or in a way that was too burdensome, but that "the principle was the right principle".

The government, which responded to growing anger among motorists in May by indicating it would defer a rise in fuel duty in September, is indicating it has no immediate plans to withdraw the increase in vehicle excise duty.

The prime minister's official spokesman reiterated today that the government's position had not changed.

He said: "The government's policy was set out by the chancellor in the budget and that is the government's position.

"What the government will acknowledge is that we do have to take difficult decisions sometimes if we want to show we are serious about our green agenda.

"The action we are taking in relation to VED will save an additional 1.3m tonnes of CO2 by 2020."

The government also came under pressure to scrap its "green" car tax from the car-making industry.

Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, told MPs that the "massive shift" in road tax policy was more about "filling a cash gap" than reducing CO2 emissions.

He told the Commons environmental audit committee that the industry had not been consulted about the changes, and warned that the new measures could lead to people hanging on to old, polluting cars for longer.

"You shouldn't underestimate the value of a second-hand car in people's ability to buy a new vehicle. There could be a perverse incentive for people to hold on to their vehicle longer simply because they do not have the value to renew that vehicle," said Everitt.

 

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