Martin Salter, Labour MP for Reading West last week called for a re-think over retrospective increases in Vehicle Excise Duty for older cars, in a House of Commons Debate on the subject.

The Vehicle Excise Duty (VED) is a graduated tax designed so that people gain financially by choosing the car with the best environmental performance in a given group. The government proposes that from 2009 those who choose to buy the most polluting cars will face a one-off purchase charge of up to £950 in the first year, whilst all vehicles registered after 2001 would be placed in one of 13 different tax bands ranging from £0 to £440 in 2009 and £0 to £455 by 2010.

Mr Salter spoke out against the measure, saying that while he agreed with the principle of graduated tax, he opposed the fact that it would be back-dated to all those who have purchased a fuel-inefficient car since 2001, saying that this would hit low income drivers. In his House of Commons speech Mr Salter called for the retrospective increases to be dropped and for the new bands to apply to future vehicle purchases only. He said:

“I agree wholeheartedly with the graded vehicle excise duty…I have no problem with incentivising green choices and with making it more expensive to do the wrong thing by the environment. However, I do not agree with denying to the people who can least afford it the opportunity to make an informed and empowered choice in favour of the environment and their family budgets.”

He added:

“We can talk about choice, but choice is always an option for the rich. People on low incomes do not change their car every year or two. They need longer than from now until 2010 to make the changes necessary to cut vehicle emissions without being penalised by higher car tax.”

The Conservative Party published very similar proposals last September in their Quality of Life policy document including “an emissions related tax at the point of purchase” for polluting vehicles and “increasing the VED differentiated between the top and bottom bands of emissions performance capped at a maximum of £500″

However, though he spoke out against aspects of the Government’s plans, Mr Salter also slammed the Conservative Party for opposing the principle of taxing those who choose to buy the most polluting vehicles, saying that it demonstrated their Party’s lack of true green credentials and was hypocritical in the light of their policy statements of 8 months ago:

“The Conservatives accuse the Government’s proposals for graduated vehicle excise duty of being dressed up as an environmental measure but solely designed to increase and raise tax revenue, yet when the Conservatives propose precisely the same policy it is apparently the work of environmental visionaries that we should follow and that should lead the debate.”

Mr Salter added:

“The motion shows that the Conservatives are prepared to will the end but not the means. I believe that the motion misses the point. It calls for the abolition of increases in vehicle excise duty instead of addressing the point of concern for those in my party and elsewhere in the country, which is the retrospective nature of the policy.”

Mr Salter urged the Government to listen to the needs of low income families and to be wary of undermining public support for “green taxation as an environmental tool”. He said:

“I strongly urge the Government to consider what I and other members of the House have said on the unfairness of the retrospective tax on low income families. There is still time to do the right thing by the environment without hitting the people whom we all came into politics to help and support.”

Since this speech Mr Salter has been offered a meeting with Chancellor of the Exchequer to press his case in person.