MPs call for higher taxes for most-polluting cars

The government's controversial proposals to increase road tax for " gas-guzzling" vehicles have attracted fresh criticism today, with an influential committee of MPs claiming that while the changes represent a "step in the right direction", they do not go far enough.

Under the changes, set out in this year's budget, the number of road tax bands will be increased to 13, with some of the least-polluting vehicles facing taxes of as little as £20 a year and the most-polluting cars seeing their annual levy rise to more than £455 from 2009/10.

The move secured praise from some environmental groups, but attracted criticism from both opposition and Labour backbench MPs who claimed that the decision to apply the new rates to all vehicles made since 2001 meant that it represented a "retrospective" tax and did not meet the criteria for a truly " green tax", as many voters would be unable to easily sell their car and replace it with a more fuel-efficient model.

However, the situation for the government has now been complicated further with the release of a report from the Environmental Audit Committee, which agrees that the new taxes are not retrospective, but insists it should be bolder and raise vehicle excise duty still further for the most carbon-intensive vehicles.

Speaking to BBC One's Breakfast, committee chairman Tim Yeo said that more should be done to encourage people to buy the greenest cars available. "They need the biggest possible incentive, that's why the government should be even bolder - really penal rates for high-emission cars and really attractive 'carrots' so that tax is almost nothing on the greenest models," he said.

The report argued that with 75 per cent of car purchases being for second-hand models, there was a strong case for the new taxes to apply to older models. But it criticised the government for including the details of the changes in the small print of the budget, a move which it warned could serve to undermine the case for green taxation. It also advised that the money raised should be used to fund a 'car scrappage' scheme that would help drivers of the most-polluting vehicles with the cost of switching to cleaner models.

Yeo added that the government's projected carbon savings of 1.3m tonnes a year by 2020 as a result of the changes were far lower than they could have been.

There was further evidence that MPs remain split on the proposals when three members of the committee disagreed with the official report and released a minority report claiming that the changes should be put on hold until the government had undertaken a full analysis of how drivers on low incomes would be affected by the changes.