Page last updated at 18:41 GMT, Monday, 26 May 2008 19:41 UK

Poorer drivers 'hit hard' by tax

Joan Ruddock
Environment minister Joan Ruddock said the tax rises were necessary

The government is coming under mounting pressure from hauliers and its own MPs to change its mind on measures that threaten to raise the cost of driving.

The Labour MPs say poorer motorists will suffer most from plans to increase road taxes on more polluting cars.

Road hauliers are also angry that fuel duty is set to rise by 2p this autumn.

But environment minister Joan Ruddock said that while she sympathised with motorists, the government "could not lose sight of the environment agenda".

What we can't do is lose sight of the environment agenda because this is everybody's future, the future of the planet
Joan Ruddock, Environment Minister

The MPs say they are concerned about the potential impact of a planned change in vehicle excise duty (road tax) which will see drivers paying more for more polluting cars registered since the end of 2001.

So far 35 Labour MPs have signed a motion calling on the Treasury to think again about the retrospective aspects of the policy.

They plan to warn the chancellor, when Parliament returns next week, that the government could lose votes over the issue.

One Labour MP warned that the party also risked alienating "Mondeo man" - the name given in the past to middle-income voters Labour needs to woo if it wants to defeat the Conservatives.

Rob Marris, MP for Wolverhampton South West, said: "Millions of people will be affected. Medium-sized family cars, depending on what sort of engine they have and what sort of emissions they have, could be hit very hard."

Increase 'unfair'

Labour MP Ronnie Campbell, who framed the MPs' motion, told the BBC: "The increase is unfair to people who bought their cars a year ago, not knowing that the government was going to put that road tax on."

He said the government was in danger of making the same sort of mistake as when it abolished the 10p income tax rate, and was accused of penalising poorer families.

Mr Campbell, MP for Blyth Valley, also called on the government to think again over plans to raise the cost of fuel duty by 2p per litre from the autumn.

He said: "Fuel is already 5 a gallon in some places...the chancellor needs to cancel the 2p rise.

"It's a tough one for the environmentalists, but unfortunately people at this time can't afford it."

UK road haulier companies are also warning of dire consequences if the planned 2p rise goes ahead.

Special exception

Haulage company boss Peter Carroll told the BBC that fuel prices were increasing "almost daily" and that British companies could be driven out of business.

Mr Carroll is helping to organise a lorry drivers protest on Tuesday, when hundred of hauliers are expected to converge on central London.

The drivers plan to hand in a letter to Downing Street, calling on the government to make a special exception and grant a fuel duty rebate to operators of "essential vehicles".

Ms Ruddock said the government had already shown sympathy for motorists by delaying the 2p increase in fuel duty until the autumn.

She said the environment would benefit from the plan to increase road taxes on more polluting cars.

The changes, due to come into effect next year, will mean cars will be put in one of 13 bands from A to M, based on their carbon emissions.

Owners of the most polluting cars in band M will pay 440 in tax. And from April 2010, people buying the most polluting cars would pay a one-off "showroom tax" of up to 950.

Ms Ruddock added: "What we can't do is lose sight of the environment agenda because this is everybody's future, the future of the planet."

She denied the retrospective aspect of the policy was unfair.

"Over a 10 year period...I think the direction we have been going in has been clear to people at the time," she said.


SEE ALSO
Treasury 'must end fuel tax plan'
22 May 08 |  Business
Tories warn of car tax 'timebomb'
14 May 08 |  UK Politics
Fuel costs force haulier to close
14 Apr 08 |  North East Wales

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