Going north: Road tax set to rise for millions

Hundreds of thousands of car owners earning less than £15,000 a year will be hit with road tax rises of up to £245, new estimates have revealed.

Almost 400,000 of the poorest drivers will pay an average £80 more, equal to two days' take-home pay, under controversial Government plans to overhaul vehicle excise duty.

Around 140,000 will be stung for at least £100, while those with the most polluting vehicles will be subjected to the maximum £245 increase  -  more than a week's wages.

The figures come a day after the Treasury revealed that almost half of all motorists - 9.4million - will be worse off once the scheme is fully implemented in 2010.

And they are certain to stoke further anger from rebel MPs furious that another Labour tax change will hit the poorest hard following the 10p tax fiasco.

Rebel MP Ronnie Campbell has put down a Commons motion signed by more than 50 Labour backbenchers demanding a rethink.

'We're flexing our muscles and saying: "Come on, be careful here. you're going to tax these people, they're working-class people, they're our core vote,"' he said.

Treasury Minister Jane Kennedy admitted yesterday that low-income families would be among the 9.4million losers.

Analysis by the Tories shows that the exact number paying more from 2010 will be 397,497.

Of those, around 19,000 will be hit for £245, 29,000 for £220 and 93,000 for £100. Such figures will make large dents in the tight budgets of families already feeling the squeeze from higher fuel and food bills.

'Hundreds of thousands of families on low incomes will be losers from Gordon Brown's road tax hikes,' said shadow Treasury minister Justine Greening, who assembled the figures.

'How does he expect those earning less than £15,000 a year suddenly to find £245, much less the thousands of pounds it would cost to buy a new, lower-emission car?

'This Government is bleeding low-income families dry, just as they are most under pressure from rises in the cost of living.'

The figures were released at the end of a day of political wrangling over comments made by the Prime Minister to MPs last month.

The Tories demanded a Commons apology after Mr Brown had claimed a 'majority' of drivers would benefit from the reforms, which have been sold as an environmental measure.

Shadow Chancellor George Osborne accused Mr Brown of the serious charge of misleading MPs when Treasury figures revealed that fewer than one in five car owners would actually be better off.

Cars will be divided into 13 groups depending on carbon dioxide emissions under the new system, which kicks in next year. But the biggest changes will hit in 2010.

Just 3,944,700 cars out of the 22 million on the road by then -18 per cent - will see the price of a tax disc fall.

At the same time, more than one million drivers of vehicles registered between 2001 and 2006 will see road tax jump from £210 to either £430 or £455 depending on emissions. Others will be hit with increases of between £10 and £155.

The Government is under intense pressure to dump this 'retrospective' element of the VED shake-up and Mr Darling has given rebel Labour MPs private assurances that he will look again at the policy in the autumn.