Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has made an assessment of whether Vehicle Excise Duty rates for vehicles in the highest bands are a proportionate application of the polluter pays principle.

Vehicle Excise Duty (VED) is a tax on vehicles used or kept on public roads. Different VED rates apply to cars, vans, and motorcycles, and the rate for each vehicle is calculated according to a range of factors, such as its date of first registration, weight, or CO2 emissions.

Since 2001, the tax system has encouraged the uptake of cars with low carbon dioxide (CO2) emissions to help meet the UK's legally binding climate targets. Cars first registered between 1 March 2001 and 31 March 2017 pay VED annually according to CO2 emissions.

From 1 April 2017, a reformed VED system was introduced for new cars. Under this system, new cars pay a variable first year rate according to the emissions of the vehicle, with the most polluting currently paying over £5,600, and zero emission models currently pay £10. After the first year, most cars move to a standard annual rate, currently set at £200.

The Government annually reviews the rates and thresholds of taxes and reliefs to ensure that they are appropriate and reflect the current state of the economy. The Chancellor makes decisions on tax policy at fiscal events in the context of the public finances.