Call for motoring tax reform

Former transport minister Stephen Ladyman has called for a reduction in fuel duty as part of a "new deal with the motoring public".

The Labour MP said on Friday that the old fuel duty escalator should be replaced with a new "duty moderator" which automatically adjusts the tax when the cost of petrol rises and the Treasury takes more tax anyway.

Chancellor Alistair Darling has indicated that he is likely to scrap or postpone a two-pence increase in fuel duty set to come into force in the autumn due to the record level of global oil prices.

But Ladyman said he should go further by introducing the new mechanism.

"Motorists understand the need to raise money from fuel duty but they don't believe the fuel duty escalator and recent changes to road tax are fair," he wrote in an article on the website of the Progress magazine.

"So let's start the process of striking our deal with the motoring public by scrapping the fuel duty escalator and replacing it with a duty moderator that recognises that when the price of fuel goes up the Exchequer's VAT take increases and the rate of fuel duty can go down."

Ladyman is also one of around 50 Labour MPs lobbying for a re-think on planned changes to vehicle excise duty which could hit low and middle income earners.

"A 'green' tax that you cannot avoid by changing your behaviour is not a 'green' tax, it's just a tax," he said.

"So, in future, changes to excise duty aimed at encouraging people to drive cleaner cars should never bite on vehicles already on the road but always to new vehicles."

Policy changes

The article was also one of a number published by Progress from normally loyal Labour MPs setting out suggested policy changes.

Copeland MP Jamie Reed, an unpaid government parliamentary private secretary, also said that ministers must "look again at some aspects of environmental policy".

"If politicians of any party make environmental policies overly expensive and inconvenient for ordinary people, then ordinary people will begin to turn their backs on green policies and those who pursue environmental goals," he wrote.

"In short, if left unchecked, 'green' taxation could poison the progressive, democratic pursuit of environmental aims."

Northampton North MP Sally Keeble also called for an appeal "middle-income Middle England" with tax cuts on fuel, a "radical overhaul" of tax credits and more support with housing costs.

"Middle-income Middle England has moved on since 1997, and needs to know that we have moved too," she warned.

"The tax system provides the most powerful means of convincing this new electorate that we're on their side."

Cleethorpes MP Shona McIsaac and former Home Office minister Fiona Mactaggart both also warned against any retreat from the centre ground.

"Labour must be the party of ambition and aspiration of a kind that does not contradict but builds on Labour values," Mactaggart said.

"We must look like a party with our finger on the electoral pulse to protect ourselves from the Tory charges that it's 'time for a change'. Because times are changing, and we must change with them."