Finance Bill

My right hon. Friend makes an interesting point. If we are to reduce motor vehicle emissions, we clearly need more effective tools than the one that the Government have proposed in this year's Budget on the change to vehicle excise duty. Those who will be affected by the proposals are people with older cars, people with family cars and people on low incomes who simply cannot afford to upgrade to a less polluting car. What kind of policy creates a situation in which the owner of a new Porsche will face a smaller tax increase than a family with an older family car? It is clear that we need to revisit this decision. I want to focus for a moment on the most serious aspect of the retrospective part of this tax hike—namely, the impact on people on low incomes. From statements made by Ministers, and from the minuscule amount of data that I have received in answer to parliamentary questions, I understand that about 1.3 million people earning less than £15,000 a year will be hit by above-inflation increases in vehicle excise duty. Some of them will face rises of £245 a year. That is a week's take-home pay that the Government are going to take out of their pockets through this proposal. We believe that up to 750,000 of them will face increases that are triple the rate of inflation. It is completely unacceptable that these changes to vehicle excise duty should have a greater impact on those on the lowest incomes. Whatever hon. Members' view of graduated vehicle excise duty might be, we would all have hoped that the Government would be honest about what was being proposed. That was not the case, however. They have proved to be disingenuous about the facts from the word go. The retrospective element of the changes to vehicle excise duty were buried in the fine print of the Red Book. I am not sure how many families the Chancellor imagines read the Red Book, but I think that it would have been courteous, respectful and decent of him to tell them about these changes in his Budget speech. At the very least, he could have clearly described the change in the Red Book for what it was—a retrospective tax. But he did not have the decency to do that either. Instead, it was left up to readers of the Red Book to infer from table headings and dates that changes to road tax levels had been put into the Budget in this way. Another thing that was not mentioned in the Red Book was the transition period over two years for those worst affected by the changes announced in this year's Budget. I cannot help but think that that was introduced as an afterthought.