Govt wins car tax fight

Wednesday, 2 July 2008 12:00 AM

The government has won a battle on vehicle excise duty against the Conservatives and some of its own party.

Tory plans were based on exempting vehicles registered before March 2006.

That vote was lost by 303 to 240 votes.

Early fears of Labour rebels voting with the opposition dissipated after promises - not dissimilar to those around the 10p-tax rate yesterday - the issue would be returned to in the
chancellor's pre-budget report.

Six Labour rebels stood their ground and voted with the Conservatives. They were Kate Hoey, Kelvin Hopkins, Peter Kilfoyle, John McDonnell, Albert Owen and Linda Riordan.

But that was a far reduced number from the forty backbenchers who signed a motion opposing the tax, which applies to more polluting cars.

Car tax is traditional Conservative territory, with plenty of supportive tabloid headlines available for any party which stands up to them, but Labour backbenchers were concerned the tax will hit low-income families just when fuel costs are already taking their toll.

Meetings last week between the chancellor and various backbenchers led to rumours of a possible climbdown, but the Treasury denied that was the case.

The debate came as a new Ipsos Mori poll shows petrol prices moving to the forefront of people's minds, with 16 per cent now saying they are important. This represents the highest level of concern about this issue since December 2000.

Tags:
• economy
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• economy and finance
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• taxation