Backbench Murmurs Over Vehicle Excise Duty

Alistair Darling, the Chancellor of the Exchequer, is facing a fresh backlash by Labour MPs over his Budget plans to increase the vehicle excise duty of more polluting cars.

Ronnie Campbell, MP for Blyth Valley in Northumberland, has tabled an early-day motion calling on the Chancellor to rescind plans, which could see the owners of some popular makes of family car paying an extra £90 for their tax disc. He has written to his fellow Labour MPs and so far has more than twenty signatures in support.

In this year's Budget the Chancellor announced that the system of vehicle excise duty would receive a major overhaul. The new system would see vehicles taxed on a sliding scale depending on their carbon emissions, with the cleanest vehicles paying less. Furthermore a new 'showroom tax', also on a sliding scale, would be added to the price of newly registered vehicles from 2010.

New vehicle excise duty tax bands (from BBC News).

What concerns Mr Campbell the most is that the proposed measures - announced in this year's Budget but not due to be implemented until next year - amount to retrospective taxation on those who can least afford it.

Speaking to the Guardian, Mr Campbell said: "They're (the Government) saying, if you've got an old car, you have to go out and get a new one: but these are working-class people; they can't afford to do that."

Justine Greening, the Conservative Shadow Minister for the Treasury, said of the new tax hike: "This measure is deeply regressive, and it will most acutely affect low-income families."

So if you were lucky enough to benefit from the Chancellor's £120 giveaway last week then rest assured that he'll definitely be taking it back again somehow!