Pressure on the chancellor, Alastair Darling to reconsider increases to the Vehicle Excise Duty (VED) bands, which are due to come into force next April, is mounting.
Forty backbench Labour MPs have now signed a motion calling for Mr Darling to reverse his decision, which will see the VED rates on many family cars more than double by 2010.
Last week MPs questioned the chancellor on what research he carried out prior to making his Budget announcement, after it emerged that over one million low-income families will be forced to pay hundreds of pounds more to tax their family car next year.
Justine Greening, shadow transport minister, said: “This is the 10p fiasco on wheels.”
Parliamentary secretary at the Treasury, Angela Eagle, said: “The Chancellor keeps all taxation policy under review.
"As part of a package of measures to reduce emissions from transport, these VED reforms will send strong signals to motorists to purchase more fuel efficient new and second-hand cars.”
She confirmed that some low-income families will be forced to pay up to £200 a year more to tax their car.
“The best available relevant data suggests that where lower income households do own a car, they are more likely to own a pre-2001 car, for which the maximum VED rate will be £200 in 2009, as opposed to the maximum VED rate of £440 for post-2001 cars,” said Ms Eagle.