Ministers hint at road tax climbdown - Auto Trader UK - News and Reviews Hub


Ministers hint at road tax climbdown

Ministers hint at road tax climbdown - News image
Alistair Darling and Gordon Brown may be forced to U-turn on the issue of car tax

28 May 2008

PA

Ministers hinted at another Government tax climbdown today amid stark warnings Labour is alienating the ordinary voter on a range of issues.

Senior Cabinet colleagues insisted the Prime Minister is "listening" to anger over a planned increase in road tax on gas guzzling cars expected to hit nearly 18 million people.

The row has again put Mr Brown under pressure from Labour MPs who forced him this month to give ground over the abolition of the 10p rate of income tax.

They have given warning how public fury over changes to vehicle excise duty (VED) could reach the same proportions as the 10p tax debacle.

One complained the issue was only one of many leaving traditional Labour supporters disaffected with the Government.

"I'm getting complaints from our core Labour vote – they feel the Labour Government is just hitting them left, right and centre," Labour's Bolton South East MP Brian Iddon warned.

"They are heavily bruised at the moment."

As well as the VED reform, Dr Iddon cited the ban on smoking in public places and rising alcohol and food prices as particular causes of anger.

"They just don't think the Labour Government is standing up for them anymore," Dr Iddon said.

He is among more than 30 Labour MPs to have signed a Commons motion expressing concern at the retrospective change to VED bands which will affect all cars bought since 2001.

They’re concerned many people have purchased cars in recent years with no knowledge of the green incentives announced in this year's Budget, to be applied retrospectively.

Figures obtained by the Daily Telegraph suggest seven in 10 of Britain's 26 million motorists, many on low incomes, will be hit by additional road tax of up to £245 a year.

Justice Secretary Jack Straw said the change in vehicle excise duty would not come into effect until next April and Mr Brown and Mr Darling were "listening to public concerns."

"If there are going to be decisions announced about this they could be announced in the autumn statement," he said. He went on to insist Mr Brown's position was safe, amid widespread reports of unease among ministers about Labour's prospects at the next general election.

Business Secretary John Hutton also appeared to offer some hope to backbenchers unsettled by the car tax plans.

"The Chancellor is listening to what people are saying about vehicle excise duty, as he has done on a number of occasions recently about tax rises," he said.

"And people are concerned about it – it’s right we listen to people's concerns."

Former Europe minister Denis MacShane warned voters were angry their money was being swallowed up by rising prices and the "insatiable greed of the state."

He suggested Mr Brown could cut taxes, adding: "This can be targeted at the indigenous working class, furious at the incessant year-on-year council tax increases above the rate of inflation."

Louise Ellman, Labour chairwoman of the cross-party Commons Transport Committee, called on ministers to acknowledge the concerns of UK motorists over soaring fuel costs.

She said a protest by hauliers in London today reflected "wider concern" about fuel prices and the rising cost of living.

Labour critics of the VED changes include ministerial aide Rob Marris. Shadow chancellor George Osborne urged the Government to perform a U-turn on the issue claiming poorer families with older cars will be hit hardest.

Mr Osborne said: "At a time when families are feeling the rising cost of living, the Government would be foolish to proceed with a big increase in road tax on family cars.

"Everyone knows Alistair Darling and Gordon Brown will be forced to U-turn on this issue, as they have on so many other tax changes, so why put off today what they will have to do tomorrow?

"The Conservative Party has consistently opposed these measures.

"We believe any increases in road tax should be focused on the most polluting vehicles and offset by reductions in family taxes so they are genuine green taxes, not stealth taxes."

Mr Straw dismissed any suggestion Mr Brown's job was under threat.

"I'm absolutely convinced Gordon Brown is the very best person to lead the Labour Party and the Government through these difficulties and beyond," he said.

Mr Straw, who has been tipped as a potential successor to the Prime Minister, pointed out he’d led Mr Brown's Labour leadership campaign last year.

"Nothing which has happened has changed my view – he is the best man for the job," he said.

He went on: "There’s no contest, there will be no contest and neither should there be."

Environment minister Phil Woolas said everybody knew there were "difficult circumstances" surrounding fuel prices at the moment. He told BBC2's Newsnight the Government "planned" to proceed with its VED changes, but matters were kept "under review."

"We have made it clear – we will go ahead with the announcement that we made, but we have also made it clear – and this is not contradictory – we will have an open mind in the future," he added.

What do you think of the new road tax system? Have your say on the Auto Trader Blog.


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