Government reconsiders road tax changes

* Government heads off rebellion * Backbenchers promised review of VED plans * Conservative bid to stop changes being back-dated fails...

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Jim Holder
3 Jul 2008 13:10

The Government says it will re-examine controversial plans to raise Vehicle Excise Duty (VED) on the most-polluting cars, following yesterday's debate in Parliament on the issue.

However, Conservative proposals to stop retrospective road tax rises being applied to older cars were rejected, after MPs voted 303 to 240 against them.

The Government's assurance that it will re-examine the plans, announced in this March's Budget, saw off a potential rebellion by Labour MPs. Just six voted against the Government, with rebels having been reassured by suggestions that the measures will be phased in rather than brought in straight away.

Under the plans, branded unfair by the Tories, some motorists face VED rises of up to an extra 245 on their cars.

Treasury Minister Angela Eagle said that she had been listening to the concerns of Labour MPs, and that ministers were looking at ideas put forward to help hard-pressed motorists and hauliers.

Shadow Treasury minister Justine Greening branded the measure unfair, saying: 'The people who are being affected 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.

'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?'

Eagle countered by saying that the Tory plans were 'undesirable, unworkable and downright peculiar'.