Government must U-turn on plans to hit families with new car taxes

Bob Blackman warns of soaring cost of living across Harrow

Working families across Harrow will find it even harder to cope with the soaring cost of living, Bob Blackman, prospective parliamentary candidate for Harrow East,warned this week, thanks to Gordon Brown’s new plans to hike taxes on family cars.

Fuel prices at the pump are rocketing, and households face ever-higher gas and electricity bills on top of higher council tax. The cost of driving a car will soon be even higher. Low-income households will be the hardest hit, just as they have been with the 10p income tax hikes.

The Government is to change the way that Vehicle Excise Duty (VED) is calculated to raise an extra £2,500,000,000 for Gordon Brown’s coffers. Family cars face higher VED as well as a ‘showroom tax’ for new cars. The VED tax will be retrospective – so any car bought after 2001 will be hit by the higher tax rates. This will lead in turn to a plummeting re-sale price for second-hand cars. This will make it more difficult for people to replace their car and upgrade to a new or better one.

For example, the tax bill for a typical Ford Mondeo will rise from £210 to £310 a year, with a new £500 showroom tax on top. Yet, even the Government’s own estimates show that carbon dioxide emissions from motoring will hardly be cut at all.

Bob Blackman said:

 “At a time when families are feeling the pinch of the rising cost of living – because of higher fuel prices, energy bills and council tax – the Government should scrap its plans for a big increase in road tax on family cars. This is yet another slap in the face for hard-working families from Labour, on top of the 10p income tax hikes.

“Conservatives have consistently opposed these measures. The Government must execute a sharp U-turn. Any change in road tax should focus only on the most polluting vehicles, and be offset by equivalent reductions in family taxes. All Gordon Brown is interested in is finding new ways to push up his notorious stealth taxes even further.”

Notes to Editors

GORDON BROWN’S TAX HIKES ON FAMILY CARS

The March 2008 Budget announced plans for sharp hikes on Vehicle Excise Duty (VED) on family cars. The tax increases are fifty times larger than the tax cut on the smallest clean cars.

The table below shows the current Vehicle Excise Duty rates in 2008-09, and the new taxes for 2010-11, which will involve higher Vehicle Excise Duty and a new ‘showroom tax’ when the car is bought (on top of VAT).

Although the VED changes will raise revenues from £1.9 billion in 2006 to a £4.4 billion by 2010, Treasury projections show that Carbon Dioxide emissions from motoring will barely change.

The tax is retrospective, affecting all cars bought since 2001 – rather than just brand new cars.

RISING COST OF DRIVING

The table below shows the cost of running a car in modern Britain, for someone running an average 2 litre big car, driving 12,000 miles per year (excluding the cost of the car itself).