Tories lose car tax hike challenge

The Government comfortably side-stepped a damaging Commons defeat over its plans to increase car tax on the most polluting vehicles by up to £455.

Conservative efforts to force an amendment on to the Finance Bill to stop the change was rejected by 303 to 240, a Government majority of 63.

Tories labelled Chancellor Alistair Darling's Vehicle Excise Duty (VED) plans "unfair and ineffective" and claimed poorer families would be hit hardest by the change.

The proposals have also worried Labour backbenchers, with almost 50 signing a Commons motion branding the changes "retrospective" because they will apply to all cars registered since March 2001.

But Exchequer Secretary Angela Eagle branded the Tories' proposal "undesirable, unworkable and downright peculiar".

She said multiple systems of VED would cause a "severe administrative headache" for the DVLA.

Ms Eagle told would-be Labour rebels she had been listening closely to their views and ministers were examining ideas put forward to help hard-pressed motorists and hauliers but acknowledged there were no "easy solutions" to the pressures caused by rising fuel prices.

Shadow treasury minister Justine Greening said the Conservatives did not have a problem with graduated VED linked to the level of pollution of cars.

In total, 2.3 million people would see their car tax rise, creating a situation where the owner of a new Porsche would face a smaller tax increase than a family driving an older family car, she added.

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