Parliament debates VED tax rate change

Today, Parliament will debate Chancellor Alistair Darling's plans to raise Vehicle Excise Duty on the most polluting cars registered since 2001.

Under the plans, owners of some of the oldest, most polluting cars could face a tax rise of 200. However, the scheme has been criticised because the owners of these cars often have low incomes.

In addition, there are concerns that the value of the cars will plummet as they become more expensive to run.

The Conservative Party estimates that 2.3 million families will have to pay between 100 and 245 more each on cars that they already own.

The Treasury counters this by saying that low-income families typically own smaller, less-polluting cars, and that the VED revisions mean that 66% of drivers will pay less or no more than at present.

The Conservatives are proposing that the higher charges should still apply to new cars, but not to those bought before March, when the proposals were announced in the Budget.

Shadow treasury minister, Justine Greening, said: 'Green taxes can only work at changing behaviour in the future. What the Government did in its Budget this year was announce that it was going to put green taxes on people who'd already bought cars up to several years ago.'