Thursday, July 10, 2008

Government to review car tax plan

Following the revelation yesterday that the Prime Minister 'mis-spoke' when he said in Parliament that the majority of drivers would benefit from proposed car tax changes, Chancellor Alistair Darling has appeared in Parliament this morning to answer questions about the plans.

Finally confirming what other ministers and backbench MPs had already been pushing for, he indicated that the plan will be reviewed before the Pre-Budget Report, due in the Autumn.

Official estimates given yesterday to Conservative shadow Treasury minister Justine Greening in a Parliamentary answer revealed that vehicle excise duty will rise for 44% of vehicles made since 2001 - by up to £245 for the most polluting ones - but will fall for 33%.

An estimated nine million car users would have to pay more under the reforms.

Answering for the Treasury, Angela Eagle MP also admitted that five of the UK's 30 most popular cars would pay more.

So if you drive a 2.2l diesel Land Rover Freelander, a 1.6l unleaded Toyota Auris, a 2.2l diesel Honda CR-V, a 1.8l unleaded Vauxhall Vectra or a 1.6l unleaded Vauxhall Zafira, prepare for a wallet-bashing.

Most interestingly, the government's difficulties with getting the plan through Parliament seem to be greater than first envisaged.

Complaints from Labour backbenchers don't just seem to relate to the backdating of the changes to older cars made after March 2001 - thought to be the most contentious part of the proposals.

Speaking on the BBC News channel, Martin Salter - far from among the most rebellious of Labour MPs - complained that even "two years" was not enough time to give people a chance to change their car-buying behaviour.

This would suggest that the government faces problems getting the proposals through Parliament if they make the changes applicable to anything other than brand new cars.

But then, that would mean people are given a chance to dodge the higher charges by making alternative choices, and make the proposals actually 'green' - rather than the great fundraiser for the Treasury that they are actually designed to be.

What a dilemma, Darling!



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