Pressure mounts over road tax plan

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The Government is facing a damaging rebellion over the plans, with MPs concerned some owners who bought bigger cars before the change was considered could be faced with increases of up to £200.

Shadow chancellor George Osborne urged the Government to perform a U-turn on the issue, claiming poorer families with older cars will be hit hardest.

More than 30 Labour MPs have signed a Commons motion expressing concern at the retrospective change to vehicle excise duty (VED) bands, which will affect all cars bought since 2001.

The move echoes the crisis Prime Minister Gordon Brown and Mr Darling faced over the abolition of the 10p income tax band, which led to the Chancellor offering a hastily-constructed £2.7 billion compensation package.

Mr Osborne said: "At a time when families are feeling the rising cost of living, the Government would be foolish to proceed with a big increase in road tax on family cars.

"Everyone knows that Alistair Darling and Gordon Brown will be forced to U-turn on this issue, as they have on so many other tax changes, so why put off today what they will have to do tomorrow?

"The Conservative Party has consistently opposed these measures.

"We believe that any increases in road tax should be focused on the most polluting vehicles and offset by reductions in family taxes so that they are genuine green taxes, not stealth taxes."

Labour MP Ronnie Campbell, who tabled the Commons motion on road tax, said the proposals were "unfair (on) people who bought their cars a few years ago not knowing that the Government was going to put this road tax on".