Darling forced to change gear over car tax plans

Published on Saturday 28 June 2008 19:52

LABOUR has been forced to scrap its plans for a costly hike in car tax that would have affected millions of motorists.

Chancellor Alistair Darling yesterday backed down on the issue to head off a backlash by Labour MPs. Darling said he would reconsider a 'green tax' plan to increase vehicle excise duty retrospectively on cars bought before 2001.

The proposals would have left 18 million drivers facing above-inflation rises for car tax. Ministers are said to be concerned that the Government was antagonising motorists at a time when households are facing soaring petrol and food prices.

The tax plan will be debated in the Commons on Wednesday, but almost 50 MPs have signed a motion calling on ministers to "reconsider" charging drivers retrospectively.

Darling has privately assured MPs that he will listen to their concerns.

Under the changes, almost 70% of drivers would pay up to 245 a year more to license a family car. Those buying a brand new vehicle would be charged a levy of 950.