Minority report calls for Government U-turn on car tax

The Minority Report is critical of the Government’s retrospective road tax increases

A Minority Report published today by members of the Environmental Audit Select Committee calls for the Government to reverse the increases in Vehicle Excise Duty announced in this year’s Budget until their impact has been properly assessed.

The report, produced by Conservative MP Graham Stuart (Beverley and Holderness) and backed by Liberal Democrat MPs Jo Swinson (East Dunbartonshire) and Martin Horwood (Cheltenham), coincides with the Environmental Audit Committee’s report Vehicle Excise Duty as an environmental tax.

The Minority Report criticises the retrospective application of higher Vehicle Excise Duty (VED) bands to cars bought since 1st March 2001 and calls for the new VED regime to be reversed until the Government has:

  • modelled the impact on carbon emissions that the rebanding of existing cars will have;
  • produced a detailed analysis of the financial effects of the VED changes on different income groups;
  • ensured that the VED band of second-hand cars is clearly labelled by showrooms and dealers;
  • introduced a car scrappage scheme to encourage motorists to scrap older, more polluting cars for newer, greener models.

Commenting on the report, Jo Swinson said:

“Under the new Vehicle Excise Duty rules, higher rates of VED will apply retrospectively to cars bought since March 2001. Green taxes are supposed to be about changing future behaviour, but this measure penalises car owners for past decisions they have already made.

“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. Greenpeace has already said that because it will not change behaviour, the measure “gives green taxes a bad name”.

“Three-quarters of cars bought each year are second-hand, so influencing the behaviour of second-hand car buyers is tremendously important. It is therefore extremely concerning that Ministers have not modelled the impact on carbon emissions of rebanding existing cars.”

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