Sunday, June 15, 2008

Revolt looms over car tax hike

The number of Labour backbenchers supporting a parliamentary motion urging the government to reconsider massive increases to car tax has reached 45.

With the government only having a majority of 66, the number of rebels is now more than enough to block the scheme - if they vote in accordance with their views when it comes to the crunch.

It only takes 34 Labour MPs to vote with the opposition parties to thwart government plans.

Some rebels are likely to be bought off if the Chancellor Alistair Darling abandons plans to make the changes retrospective to cars made since 2001.

However, even the scale of the increases for very average mid-range cars made since March 2006 is likely to trigger widespread public dismay.

MPs fear the scheme could be as politically damaging as the storm over the abolition of the 10p income tax band, and even two ministers - Justice Secretary Jack Straw and Business Secretary John Hutton - have indicated that there should be a re-think.

Owners of typical family cars such as the Ford Galaxy, Vauxhall Zafira and Renault Espace will face an increase in duty of up to £245 by 2010.

Ronnie Campbell, the Blyth Valley MP who tabled the motion, said: "It's unfair that people bought their cars a few years ago not knowing that the government were going to put this road tax on.

"When you think that the 10p (tax abolition) was costing people £200 a year; the outbreak of that one was enormous. When people get their road-tax letter through the door next year and find they have an extra £200 to pay, well, I don't have to say any more, do I?"

Another signatory to the Commons motion, Angus MacNeil, SNP MP for Na h-Eileanan an Iar, said it was clear, as we have been saying since the scheme was announced, that the increase in VED had not been thought through and that Mr Darling had taken a sledgehammer to the issue.

He told The Herald: "It's going to be like the 10p tax: sooner or later they will have to do a U-turn."

In total, 62 MPs have signed the motion, with 9 Conservatives, 7 Liberal Democrats and one SNP MP joining the Labour rebels.

While such Early Day Motions have little real power, they are influential in indicating backbench opinion on a policy before it comes to a key vote in Parliament.

The government's Finance Bill incorporating the plans to is due for further consideration in Parliament
next week.

Monday, June 09, 2008

Government gives go-ahead for Manchester C-charge

Transport secretary Ruth Kelly has in the last hour announced the government's support for the introduction of congestion charging in Manchester.

In the now classic style of Bungler Brown's government, the news comes despite recent admissions in London that the capital's scheme has failed to cut congestion, evidence that the average speed of traffic in London is dropping, not increasing and increasing pressure for the scheme to be shrunk.

Hardly the optimal moment to announce an expansion of the idea, even without considering financial factors like car users already being hammered by fuel prices and people generally feeling the pinch.

It would also be unwise for Manchester residents to assume that the initial charge of £5 for entering the zone would remain at that level for very long, or that the boundaries of the two-ringed invisible toll wouldn't soon shift from their initial positions in order to increase revenue.

A public consultation will now be held on the plan.

The government will provide £1.5bn to support the scheme, with the rest of the £2.8bn cost coming coming from the city authorities themselves.

Where the extra funds for the over-runs that inevitably blight major government schemes will come from is not clear, with local council taxpayers potentially having to foot the bill.

Responding to the government's statement, Theresa Villiers MP asked why three out of ten councils in Manchester oppose the plan.

Stockport, Trafford and Bury councils are no longer supporting the bid for funding and councillors in Bolton - where Ruth Kelly's own highly marginal seat is located - have promised to hold a public referendum on the issue.

Andrew Simpson, chairman of the Greater Manchester Momentum Group (GMMG) - a lobby group formed by major businesses opposed to congestion charging - said:

"It's right that we want improved public transport, but if the cost of that is something that's going to cost people in this region up to £1,200 a year to get to work, then I think that's going to be very bad for our jobs and our economy."

The group has support from major Manchester stores Harvey Nichols, Lookers and Makro, along with the owners of the Trafford Centre and a range of other business organisations.

In typical fashion, the scheme is being sold as a means to deliver 'a first-class public transport system'. Though where all the money Manchester residents - not least car users - have already stumped up in taxes has gone if not not towards providing just such a system is a more pertinent question.

Now we are expected to stump up even more from the public pocket in order to introduce a system that will hit car users with even more bills.

Is there no end to this government's greed for our cash?
As ever, aimed first of all at soft-target car users who already pay far more in taxes to the Treasury than are spent on road transport improvements.

Monday, June 02, 2008

Car tax row hots up

The debate over plans for a drastic hike in car tax is starting to get interesting, amid increasing fears within government that the revised scheme could prove as politically damaging as the storm over the abolition of the 10p income tax band.

The plans, announced in Alistair Darling's first Budget back in March, will create six additional car tax bands and introduce an up to £950 graduated ‘showroom tax’ on cars in the upper tax bands.

Despite being spun as a 'green' move that will persuade people to buy lower-emission, lower-taxed cars, the Treasury has already admitted that once the revised system is in force more than £700m extra a year will be delivered into the government's coffers.

A very clear indication from the horse's mouth that people will not, in fact, switch to the lower-emissions cars that attract reductions in the tax rate and the scheme is therefore largely useless in 'green' terms (but clearly very useful in government fundraising terms).

No surprise, then, that Chancellor Alistair Darling decided to try to introduce the scheme regardless.

Money or popularity?

Already reeling from severe public slapdowns in recent elections, ministers and MPs are now starting to worry that both the scale of the increases combined with the number of people set to be affected to some degree will be an explosive recipe, capable of triggering a further dramatic slide in the government's popularity.

Justice Secretary Jack Straw and Business Secretary John Hutton have been the first to break ranks with the Prime Minister and his puppet Chancellor to
suggest that it may not be the best plan to pile severe extra costs on people right when they're feeling the pinch.

They have hinted that the Autumn pre-Budget statement would be a good opportunity to take a 'fresh look' at the plans.

Backbenchers are also asserting themselves over the issue, with 35 Labour MPs (and others to make 42 in total) so far having backed a Commons motion by Ronnie Campbell MP urging ministers to reconsider.

Retrospective tax on older cars

A particular target for review is the most controversial element of the scheme - to impose tax at the new highest rate retrospectively to cars bought between 2001 and 2006.

A host of family cars
bought before March 2006, many used everyday for the school run, will see their road tax double from £210 to more than £430 unless the plans are changed.

This double-whammy aspect of the scheme will hit those who bought cars in good faith a few years ago, not knowing the government would drastically increase the road tax on them. And make it harder for those people to switch to lower-emissions cars, as the new excessively punitive tax rate will severely cut their existing car's value.

Good time for pause

Given his already pretty significant woes, and the growing controversy over out-of-control fuel prices, does Gordon Brown really want to further wind up 18m 'middle Britain' car users?

As the 'consensus' over climate change is brought ever further into doubt by
severe wintery conditions across the globe and growing lists of scientists contradicting the man-made global warming orthodoxy, now would be the perfect time for Brown to demonstrate responsible leadership and pause for a re-think.