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MPs clash on 'green' car tax hike

MPs have clashed over government plans to push ahead with new road tax rules.

The environmental audit commission dubs plans to increase vehicle excise duty for the worst polluting cars a "step in the right direction".

Its Conservative chairman Tim Yeo wants the government to signal greater changes than those currently on the table.

But the findings have proved divisive in Westminster, with a group of committee members releasing their own minority report.

Liberal Democrat Jo Swinson said the ideas amounted to 'retrospective taxation' – a "new tax an old cars".

"The public must have faith that green taxes are not about raising revenue for the Treasury, but in this case, their use is clearly more to do with filling Alistair Darling's coffers than cutting carbon emissions from our roads," Ms Swinson claimed.

The committee disagreed, saying: "The only retrospective element in these changes is that the new rates will apply to cars that have already been bought. In itself there is nothing intrinsically unfair or unusual about this."

Friends of the Earth's transport campaigner Tony Bosworth said: "We're delighted the committee believes the government's car tax changes are right in principle.

"Ministers must stand firm on their road tax plans and do more to encourage greener travel and reduce transport’s contribution to climate change."

Official estimates predict a rise in vehicle exercise duty (VED) for 43 per cent of cars made since 2001 but a reduction for 18 per cent, depending on how environmentally friendly they are.

The number of payment bands will increase from seven to 13 with those in the top bracket paying £455 for 2009/10 and those in the lowest, least polluting bracket paying nothing.