Car tax change 'to hit poorest'

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Some 400,000 households earning less than £15,000 a year are among the 9.4 million to be hit by reforms to vehicle excise duty (VED), analysis by the Tories found.

The figures intensified the pressure on Chancellor Alistair Darling to rethink the plans after warnings that the Government was heading for another damaging tax debacle.

They come after Gordon Brown faced embarrassment as it emerged he had been wrong to say the majority of motorists would be better off as a result of the changes.

In fact, 9.4 million face higher bills, there will be no change for 8.4 million and 1.4 million will pay less, the Treasury revealed.

Justine Greening, the shadow economic secretary, has now calculated that 400,000 of the poorest families will pay up to £245 a year more. On average, they will be £80 a year worse off under the changes which are due to come into effect from next April.

Ms Greening said: "This government is bleeding low-income families dry, just as they are most under pressure from rises in the cost of living."

Downing Street said the Government had no plans to reverse the changes on VED, pointing to comments by Chancellor Alistair Darling in a recent newspaper interview.

However Labour backbencher Ronnie Campbell, who tabled a Commons motion signed by almost 50 Labour MPs calling for a rethink, insisted he had won assurance that Mr Darling would look again at the issue and signalled the rebels would not stand idly by if their demands were ignored.

The rebels have complained that the changes, which will affect vehicles dating back to 2001, will hit less well off motorists who drive older cars because they cannot afford a new one.