| Previous Section | Home Page |
Mr. Maples : The hon. and learned Member for Montgomery (Mr. Carlile) has had two bites at this cherry because exactly the same points were raised in Committee. I am afraid that I shall give him pretty much the same answer. This is an example of how, when a Government introduce what is universally acknowledged to be a good scheme, within a year people are saying that it is not generous enough. However, the charities are saying that they widely welcome it. This month's issue of Charity magazine states that it is "universally acclaimed as being the best thing that a Chancellor could have done to unlock new money".
By the end of May, charities had claimed tax repayments on some 17, 000 gifts by both individuals and companies, which provided charities with income of £57 million, and a further £19 million in tax repayment claims. It is a pretty successful scheme.
The aim of gift aid is to encourage substantial gifts to charity. Tax relief is available for smaller gifts made under deeds of covenant or for gifts up to £600 a year made under the payroll giving scheme. Those are valuable assured sources of income and it is important not to undermine them. There is a danger that reducing the limit for gift aid to, say, £250 would undermine the payroll giving scheme and covenants and thereby remove an assured source of income--a flow of income over a period- -from charities.
It is not practical to give relief for all small one-off gifts to charity. Covenants, which continue for a period and for which the tax paperwork can generally be processed by the donee, or payroll giving, where it can be done by the donor, are relatively easy things to administer. Enabling people to give individual gifts of about £250 would create an administrative problem. It is for a combination of those reasons that we decided to set a minimum limit of £600 net of basic rate tax to single gifts to charity under the gift aid scheme. I understand why the hon. and learned Gentleman feels that it might be beneficial to charities to reduce the limit. However, the arguments are not all on one side and, as the scheme has been in existence for only one year, I am reluctant to concede any amendments now. I am giving him pretty much the same answer as I gave in Committee, but I can assure him that we shall keep the minimum limit in mind when we consider the results of the scheme and whether there are ways in which it can be improved.
Mr. Alex Carlile : It is disappointing that, despite strong representations from many charities, the Government are unwilling to reduce the limit at this stage. However, it is welcome to hear that the Government will keep the matter under review. Many of us who take a close interest in charities are waiting and hoping for a much more substantial law reform in relation to charities very soon. Bearing in mind what has been said, for the time being I am content to beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.
Column 144
New Clause 30
Additional personal allowance
non-discrimination-- --(1) Section 259 of the Income and Corporation Taxes act 1988 shall be amended as follows :
"and the section as amended shall have effect for the year 1990-91 and subsequent years.
(2) In paragraph (c) of subsection (1) the word "man" shall be replaced by the word "individual" and the word "wife" shall be replaced by the word "spouse".
(3) In subsection (4) after the words "husband unless" shall be inserted the words "either relief is available by virtue of subsection (1)(c) above or".'.-- [Mr. Chris Smith.]
Brought, up and read the First time.
Mr. Chris Smith : I beg to move, That the clause be read a Second time.
In Committee we drew the attention of the Government to an example of discrimination of the tax system in relation to the additional personal allowance. The allowance is available to someone who has a child living with him, if that person is a man and is married and living with a wife who herself is totally unable to look after herself throughout the year to which the allowance applies because of illness or disability. The tax relief is available to a man in such a position but not to a woman living with a totally disabled or ill husband. I believe that in Committee the Minister voiced her sympathy with our point that that is grossly discriminatory. I repeat that a man can claim the additional personal allowance but a woman in identical circumstances cannot. We believe that there should be equity between husband and wife. That is why we have tabled the new clause on Report.
In Committee the Minister said that she was sympathetically inclined towards an examination of the problem that we had identified. The problem was first drawn to my attention by my hon. Friend the Member for Dundee, West (Mr. Ross), who has a constituent who cannot avail herself of the additional personal allowance, whereas if her husband had been in her circumstances, he could have done so.
The Minister said that she was sympathetic and that she would consider the issue. She gave no absolute commitment to come back on Report to put matters right. Very helpfully, she wrote to me on 11 July to say that the Government had further considered the matter but were not yet ready to make specific proposals. I was disappointed to receive that response. Of course, I appreciate that the Government may wish to take a wider look at the issue ; they may want to consider it in the context of the benefits system as well as of the tax system. I appreciate that a tax allowance benefits only those who are taxpayers. It does not benefit everyone who might be in this particular circumstance.
12 midnight
However, to put right the discrimination now would, at least for this year, get rid of an example of discrimination in our taxation system. The Government could then spend the rest of the year considering the issue more carefully and fully and could produce more fully worked up proposals next year. But to accept the new clause now would enable us to put on the statute book, for this year at least, a measure to remove a blatant example of discrimination in the availability of the additional personal allowance.
Column 145
I hope that at this eleventh hour, as we approach the closing stages of the Finance Bill, we might just persuade the Minister of State to have another look at our new clause and to say just for once, "Yes, the Government will do something right now", and not put off doing so for fear of avoiding doing something better in the future. I hope that the Government will find it in their heart to accept the new clause and put right the discrimination. They could then perhaps go on to look more fully at how to remedy other wrongs within the system.Mrs. Gillian Shephard : As the hon. Member for Islington, South and Finsbury (Mr. Smith) said, the new clause is essentially the same as the one that we discussed in Committee. The only real difference is that the change would apply from 1990-91 instead of 1991-92. I said in the debate in Committee that the difference in the treatment of men and women was an anomaly and that I would give further consideration to this important issue. As the hon. Gentleman said, I have written to him on the matter. I am not certain whether the new clause was tabled before or after he received the letter. I said in my letter and I repeat now that the Government want to look at the issue thoroughly and carefully and that it is not possible to review the matter properly in time to reach a decision before this Report stage. However, I assure the hon. Gentleman, as I assured him in my letter, and I assure the House that we take the issue seriously. It needs to be tackled and tackled thoroughly.
Mr. Chris Smith : Of course, I appreciate the sympathy with which the Minister of State approaches the issue. I remain disappointed that she did not feel able to go that little bit further tonight and make a change in the Bill. We shall continue to press the Government on this matter because it remains an outstanding anomaly within the system. Although perhaps it does not act against the interests of many people, for those who are affected it means a lot. We shall continue to press the Government on the matter. We look forward to a specific proposal within the next few months that the Government will introduce measures to deal with this anomaly. In that hope, I beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.
New Clause 39
Rate of vehicle excise duty (No.
2)
In determining the rate of vehicle excise duty for the year 1991-92 and subsequent years for any class of vehicle the Chancellor of the Exchequer shall have regard to the principle that all classes of vehicle shall cover their track costs by broadly the same factor and that any variation for any particular class of vehicle may only be justified because of a comparative benefit with respect to other classes of vehicles to the environment.'.-- [Dr. Marek.]
Brought up, and read the First time.
Dr. Marek : I beg to move, That the clause be read a Second time. I shall be brief as it has gone midnight and we have many more amendments to get through. I could speak at length on the new clause--[ Hon. Members : -- "The hon. Gentleman has done that before."] Yes, but I shall confine my remarks to table 9, entitled, "Road taxation revenue and road costs in 1990-91 : by vehicle class" from the pamphlet, "The allocation of road track costs 1990-91,
Column 146
United Kingdom", which was issued by the Department of Transport in April 1990. That is the only table to which I shall refer in my remarks.The new clause is simple. It asks the Chancellor of the Exchequer, before he makes his Budget judgments on vehicle excise duty and costs for road users, to level out the taxes-to-costs ratio. Any differences should be accounted for by the environmental benefits that certain vehicles bring to the roads. The reason for that is simple. Table 9 shows that for cars, light vans and taxis the taxes-to-costs ratio is 3.2 : 1, whereas for goods vehicles over 3.5 tonnes the ratio is only 1.3 : 1.
We certainly need roads and heavy goods vehicles because we must transport goods, and most goods are transported by road. We must also be mindful that we do not disadvantage our industry through taxation policy compared with industry elsewhere in Europe. I am aware that transport in Germany is always that bit cheaper than it is in this country. In some ways I should like the Minister to worry not just about what goes on in the United Kingdom, but about what goes on within Europe to ensure that our industry is not disadvantaged by transport costs.
The difference between the ratios is large. Owners of large vans and motors will pay fuel tax and vehicle excise duty, and they will more than cover their costs on the road by a factor of 3.2 : 1, whereas some HGVs only just cover their road track costs. Table 9 shows that all goods vehicles over 3.5 tonnes just cover their costs by 1.3 : 1.
Let me put this in figures so that it is absolutely clear. There are 22,622,000 cars, light vans and taxis. The cost of the damage that they do to roads comes to £3,075 million. There are only 471,000 heavy goods vehicles, yet the damage that they do to roads comes to £1,510 million. Although the number of HGVs is much smaller, they do half the damage that is done by all the cars, light vans and taxis. If the House considers that, and that the HGVs' taxes-to-costs ratio is only 1.3 : 1 compared with 3.2 : 1 for cars, light vans and taxis, it will agree that something is wrong.
When we had a discussion on an associated subject in Committee, the Minister said that she would consider the matter carefully in the ensuing year. That is important. I hope that the Minister will reaffirm that commitment. I also hope that she will consider the issue in terms of the environment. If the transport of goods is unnecessary, it is obviously environmentally friendly not to undertake such a journey. It is environmentally friendly to move goods by rail or water whenever that is possible. However, I appreciate that most goods are transported by road. Little thought has been given to this issue by the Government.
Mr. Peter Bottomley : I speak with three and a half years' experience of dealing with such matters. A great deal of thought has been given to the issue. The Transport and General Workers Union would be upset if HGVs, which many of its members drive, were subject to three times their current tax. It would be reasonable to take the surplus raised from private motorists for use on pensioners, hospitals and education. However, to try to load the costs on industry when the rest of the European Community is not even taking the track costs from its HGVs suggests that the remarks of the hon. Member for Wrexham (Dr. Marek) should be directed at the EC rather than at my hon. Friend the Minister.
Column 147
Dr. Marek : Perhaps the hon. Gentleman has just entered the Chamber, but I have already mentioned the EC. The Minister must lobby in Europe to ensure that our industry is not disadvantaged. The record will show that I have now said that for the second time, and I have already said that I do not want to delay the House.The disparity is too large and not enough is being done to look after the environment and to introduce green policies in transport taxation. If the hon. Member for Eltham (Mr. Bottomley) had regard for such matters when he was at the Department of Transport, his efforts were obviously unsuccessful. I do not want to be deprecatory, but it is evident that he may have worried so much about such policies that he is now on the Back Benches--again I do not intend to be deprecatory.
A problem exists, and I hope that the Government will consider it urgently.
Mr. Michael Jopling (Westmorland and Lonsdale) : I have listened with considerable interest to the hon. Member for Wrexham (Dr. Marek), but, with respect, his speech was grossly deficient in one aspect. He did not mention the vehicle excise duty on motor cycles.
Dr. Marek : The next set of amendments address that issue.
Mr. Jopling : I am aware of that, but it is as well to raise the matter.
I must declare an interest as I am the president of the Auto-Cycle Union, which is the governing body of motor cycle sport.
The Budget caused considerable resentment among the motor cycling community, of which, as the House may know, I am a member. That statement did not refer to the fact that the vehicle excise duty on motor cycles had been increased by a far greater extent than that on motor cars. That should have been declared in the statement. If the Treasury and Chancellor should ever feel inclined to impose such a disproportionate increase in excise duty in the future, that should be made clear to the House during the course of the Budget statement. This year that duty increased considerably and I have not heard any adequate explanation as to why that was necessary.
The hon. Member for Wrexham referred to damage to roads. That is an important factor of which the House should be aware. Motor cycles cause practically no damage to roads. Given the number of people that they transport, they cause proportionately less damage to roads than any other mode of transport. Their effect on the environment with regard to congestion, the parking space that they take up, the space that they occupy in general, and the fuel that they use in proportion to the number of people that they transport make them an environmentally friendly form of transport.
I am interested in the new clause and shall listen carefully to what my hon. Friend the Minister of State says. However, in framing the Budget and the Finance Bill, proper regard has not been paid to the motor cycle community's claims. On the whole, it has been dealt a pretty dirty deal during the course of these amendments.
12.15 am
Mr. Peter Bottomley : I do not want to take the new clause too seriously because I do not think that the hon. Member for Wrexham (Dr. Marek) takes it too seriously. It is important to realise that it means either that the
Column 148
taxation on heavy goods vehicles should be tripled or that the vehicle excise duties for cars should be cut to one third of its present rate. Neither of those propositions can be seriously floated past the hon. Member for Derby, South (Mrs. Beckett).I hope that we shall continue to see a degradation in the value of the vehicle excise duty for cars--the figure should not change--and that the extra cost will be put on the marginal use of cars. That is the only sensible way to look at motor taxation. We should raise the marginal cost of using a private car both in terms of cost and time, rather than going for the road pricing theory, which is a space for every car for which someone must pay with a fistful of fivers. We should also continue to try to reduce the cost of the damage that heavy goods vehicles cause to the roads by introducing better suspension systems and by trying to ensure that lorries are kept outside residential and shopping areas.
Even before I intervened the hon. Member for Wrexham spoke about the track cost in the rest of the European Community. I emphasised that in my intervention because it needs emphasising more and more. Only when other European countries begin to realise the damage that those vehicles cause will we see fair competition between hauliers. British hauliers will do better in that competition because we have better co-operation between drivers and management and, unlike most other hauliers in Europe, our management is used to competition. I hope that the new clause is not pressed. Thehon. Member for Wrexham probably regrets having spoken on it.
Mrs. Gillian Shephard : Clearly, in constructing a policy for motor taxation a balance needs to be struck between environmental considerations, revenue received and practicalities. In that respect, although I know of the enthusiasm and expertise of the hon. Member for Wrexham (Dr. Marek) on the comparative tax paid by certain types of heavy goods vehicles, his proposals involve practical problems which he has not addressed.
For example, to bring the tax-cost ratio of HGVs up to that of cars and light vans would involve, on average, sevenfold increases in their vehicle excise duty. That means that some lorries would pay £21,000 VED a year, which might not be welcomed by British industry. Alternatively, to bring cars down to the same ratio as lorries would require us to cut their overall tax burden by £6.6 billion. As VED brings in only about £2.5 billion, abolishing it altogether would bring the ratio down to 2.4 : 1 rather than 1.26 : 1 that the hon. Gentleman seeks.
However, motoring taxation, fuel duty and vehicle excise duty are mainly about raising revenue, which amounts to nearly £14 billion, though it is clearly sensible to adopt a policy so that all classes of vehicle should at least cover their share of the public expenditure costs of the road network. All vehicles now do so as a result of the changes in VED and fuel duty that we have made over the years. I know that my hon. Friend the Minister for Roads and Traffic wrote to the hon. Member for Wrexham after the debate in Committee to explain how those duties were calculated.
I welcomed the contribution of my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), who is a distinguished motor cycle enthusiast. In his Budget speech, my right hon. Friend the Chancellor of the
Column 149
Exchequer did not have time to mention all the measures, but details of the VED increase for motor cycles were mentioned in the "Financial Statement and Budget Report", and in the Department of Transport press notice. Motor cycle riders pay less tax on fuel and a lower VED than car drivers.Environmental issues have been mentioned. We can sometimes use taxation to bring positive environmental benefits. In earlier debates we mentioned the differential between leaded and unleaded petrol which has boosted unleaded petrol's share of the market to more than 40 per cent. We also switched the balance of taxation for both private vehicles and lorries from fixed to variable costs, thus ensuring that those who pollute most, pay most. In 1980, the Armitage inquiry recommended that the excess for each sub-class of heavy goods vehicles should reflect their relative impact on the environment. It is difficult to achieve that perfectly, and we never do as well as the hon. Member for Wrexham would like, but VED paid by those using heavier rigids has, in general, increased by more than that for articulated lorries.
My right hon. Friend the Chancellor and my right hon. and learned Friend the Secretary of State for Transport pay serious attention to the needs of the environment because we all benefit from that. We have achieved much through our taxation policy, but we have been able to do so only while still having regard to fiscal policy overall, because our policy leaves my right hon. Friend the Chancellor with the flexibility to respond to new situations and concerns. The Government's aim is to achieve a fair system of taxation that takes account of all factors, not just the environment. That can best be achieved by leaving the present and future Chancellors flexibility to respond to new situations and concerns, not by restricting their room for manoeuvre.
Dr. Marek : The new clause simply proposed that the Chancellor of the Exchequer should have regard to the principle, and then enunciated the principle. The hon. Member for Eltham (Mr. Bottomley) is a man of extremes. He said that the policy had to be on the extreme left or the extreme right, but there are all sorts of possibilities in between. One can have regard to the principle, but it is sometimes hard to adopt the principle and implement it immediately. I am under no illusions about that.
We have had a useful debate. I am glad that the Minister said that the Government have regard to the environment, and the vehicle excise duty on some classes of heavy goods vehicles has risen a little more. I hope that the Treasury will ensure that the Department of Transport turns its attention to that before the next Budget because it does not look as though there will be a general election before next May or June, and there will be another Budget under the present Administration. In those circumstances, I beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.
Clause 4
Vehicle excise duty
Dr. Marek : I beg to move amendment No. 18, in page 3, line 6, leave out 15.00' and insert 11.00'.
Mr. Deputy Speaker : With this it will be convenient to take the following amendments :
Column 150
No. 19, in page 3, line 12, leave out 30.00' and insert 22.00'. No. 20, in line 13, leave out 50.00' and insert 42.00'. No. 21, in line 14, leave out 50.00' and insert 42.00'.Dr. Marek : The right hon. Member for Westmorland and Lonsdale (Mr. Jopling) referred in the previous debate to motor cycles. The amendments are an example of how the Treasury has gone the opposite way in terms of looking after the environment--motor cycles are reasonably environmentally friendly machines, at least when they have proper baffles fitted to their exhausts so that they cannot be heard from two or three miles away. Motor cycles travel a great many miles to the gallon. That means that they are environmentally friendly. Although vehicle excise duty on motor cars was not changed, the duty on motor cycles and some other vehicles was increased, and that is unfair.
The amendments are modest. They seek to raise the duty on motor cycles from £10 to £11 and not to £15. Where the duty was £20 we propose an increase to £22. Duty on the highest cubic capacity is to be raised from £40 to £50, but the amendments suggest an increase to £42. There is much concern that vehicle excise duty on motor cycles is being increased simply because there was much evasion. The last substantive paragraph in a letter from the Chancellor of the Exchequer to Mr. Peter Ryder of the British Motorcyclists Federation states :
"The widespread evasion of VED is of concern to Government because of both the revenue loss and the effective reduction in checks for MOT and insurance. It would appear that the penalties for evasion at the current level of VED are not a sufficient deterrent and I hope that the increase will help stop the slide."
What does that mean? The letter continues :
"I know that as a responsible organisation you do not condone the activities of those who ignore the law, and I hope you will understand that the Government cannot tolerate them either." What does the Chancellor mean when he says
"the increase will help stop the slide"?
Does he mean that the extra excise duty paid by motor cyclists will stop the decline in the Treasury's revenue? If he does mean that, he is advancing the unfair principle that simply because some people evade paying excise duty--and it is not only some motor cyclists who are guilty of that- -a punitive increase in vehicle excise duty should be imposed to make up for the shortfall.
The ratio of motor cycle duty to car duty has remained constant for many years. Without notice the Chancellor decided to pick on motor cyclists and to increase vehicle excise duty, and he has not offered a rational or logical explanation for doing so. I do not expect the Government to admit that they were wrong and that they will cancel the increases, but I hope that the Minister will give a logical explanation for the increases or at least admit that the changes were for completely spurious fiscal reasons and that not enough attention was paid to the impact of the increases.
The Minister should ask the Department of Transport to look at the environmentally friendly aspects of motor cycles, cars and heavy goods vehicles and submit better proposals next year.
Mr. Jopling : I apologise to the House for jumping the gun and speaking about motor cycles during discussion on the last amendment. When the Minister of State, Treasury replied to that debate she said that the Chancellor did not
Column 151
have time in his Budget statement to refer to this massive increase in the excise duty on motor cycles. All that I can say is that if he had time to refer to the contentious issue of mobile telephones, it is difficult to believe that he did not have time to refer to an increase in excise duties on motor cycles that was proportionately far larger than that for cars, and that affected far more people than a tax on mobile telephones. That argument will not wash, so I hope that neither she nor any of her colleagues on the Treasury Bench will use that argument again.12.30 am
I have yet to hear a proper explanation of why it was felt necessary to increase the excise duty on motor cycles by so much. In the previous debate, I declared my interest in this matter. Until today, I was the owner of a large capacity motor cycle, and I hope that I shall have another one the day after tomorrow.
Sir Philip Goodhart (Beckenham) : While my right hon. Friend can undoubtedly ride his machine with the greatest of skill, is he not aware that it is 12 times as dangerous to ride a motor cycle as it is to drive a car? It may be that the desire to reduce the appalling rate of casualties among motor cyclists inspired the Treasury.
Mr. Jopling : I understand my hon. Friend's point, and, like him, I am greatly concerned about the number of deaths and injuries among young people who ride powerful motor cycles when they are not particularly experienced. This is a matter of as much concern to me and to many involved in the motor cycling sport as it is to him. The Government are not backward in coming forward to tell us that they are putting up cigarette duty for much the same prevention reason. If this is why they are increasing the excise duty on motor cycles, let them tell us. As far as I am aware, that argument has not been used. The hon. Member for Wrexham referred to evasion. I was not going to mention that because I did not think that it was worth mentioning, but as he has, I should say that it is irrelevant when it comes to deciding at what level to pitch the duty. I see no point in penalising those who pay to make up for those who do not pay. I should have thought that if one pushes up the price of a road licence on a motor cycle, one encourages people not to pay it, so that is not the way to go about it.
I do not want to press this matter this year, but I should tell my hon. Friend the Minister that I feel miffed about the way that it has been handled. I feel miffed about the logic behind it, which I do not understand. This has been a raw deal for those who ride motor cycles. I hope that people will not again be given the opportunity for criticising the Government for picking on the motor cycling community by clobbering it with an excise duty. I hope that it will not happen again.
Mr. Wallace : The right hon. Member for Westmorland and Lonsdale (Mr. Jopling) was right to say that motor cyclists have been clobbered. The percentage increases are startling, especially when the vehicle excise duty for motor cars was not increased. The Minister tried in Committee to explain away the percentage increases by saying that the actual amounts were increases of £5 or £10, but for many motor cyclists the increases are not neglible. We are talking of sizeable increases for vehicles that are environmentally
Column 152
friendly. Mopeds, especially, are very economical in their use of fuel, and for many young people who live in rural areas they provide an essential lifeline. I am sure that the right hon. Member for Westmorland and Lonsdale, who represents a rural constituency, will appreciate that. Motor cycles and mopeds enable young people to enjoy social facilities and to undertake journeys to places of further education and training.I have received a petition from Mr. Victor Thomas of the Old Manse, Stove, Sandwich, Shetland and some of his friends and neighbours. It emphasises that the motor cycle is an environmentally friendly vehicle and is a necessity to many. In most instances a motor cycle uses less fuel than a motor car.
The Minister sought to give an assurance in Committee that the Government were not seeking to penalise the honest motor cyclist by raising the cost of VED to cover the loss of revenue because one third of motor cyclists do no pay VED, but one cannot help feeling that that is precisely what the Government are doing. The hon. Member for Wrexham (Dr. Marek) read out correspondence that seemed to give that impression. He read out correspondence in Committee in which a Treasury spokesman was quoted as saying that it was a measure of inflation and that the higher rate would recompense the many evasions in the form of unpaid licences. If that is the Government's approach--a hidden agenda that means that those who are honest are having to bear the burden of subsidising those who are
dishonest--their weak case is undermined.
The right hon. Member for Westmorland and Lonsdale protested against such a principle being incorporated in our taxation. I have no doubt that many people will welcome his support for local authorities that find that they have to place an added poll tax burden on many payers because of the non- payment of others. Two months have passed since the increases in VED for motor cyclists were discussed in Committee. I hope that the Minister has been made well aware of the strong feelings of motor cyclists. They have been singled out, as it were, for increases in VED. In percentage terms, the increases will be punitive. I hope that the Minister has had a chance to reconsider her position.
Mr. Cryer : I, too, have received many letters from constituents about the unfairness with which the Government have levied an extra tax on motor cyclists.
Motor cyclists attract a good deal of prejudice because sometimes their machines are not sensibly used. The exhaust systems of some machines are not properly fitted and are ineffective, and we know that motor cycles with defective silencers are ridden late at night. To criticise motor cyclists on that basis, however, is to criticise at one fell swoop all the keen motor cyclists who behave properly, who keep their cycles well maintained, who take pleasure in their use and who in many instances find them to be a necessity.
The Government's deregulation of bus services--not only in rural areas--has meant that a service can no longer be provided if a profit cannot be made. No bus company will be willing to tender if it is impossible to make a profit, and a passenger transport authority is not permitted to provide a subsidy for a service. There is therefore a greater emphasis on personal transport, and the cheapest form of that transport is a motor cycle or moped.
Column 153
The Government are militating against its use. It has been suggested that an increase in the licence fee for a motor cycle will act as a deterrent and will reduce the high rate of accidents, but that is not the correct approach. If that were the Government's attitude, I am sure that they would have increased it to try to obtain some shadow of virtue from a situation which has very little virtue attached to it.If the Government are concerned--as we all are--about the rate of accidents involving motor cycles, other measures are required. They include better training, although a fairly comprehensive training scheme has been introduced in the past few years ; a more comprehensive motor cycle test involving details of mechanical efficiency if lack of such knowledge is a contributory factor to accidents ; and more courtesy from the other vehicles that we have discussed--the HGVs--which, by virtue of their size, are sometimes involved in accidents with motor cyclists because of the comparatively diminutive size of the latter. Those factors must be tackled separately. The increase in vehicle excise duty should not be used as an excuse to deter people who wish to take up motor cycling. Hundreds of thousands of motor cyclists are sensible and careful ; they operate their machines well and find them of great use and importance in gaining access to work and leisure activities. We must take those people into account, especially when they use British motor cycles--and not, as I suspect that the right hon. Member for Westmorland and Lonsdale does, imported BMWs--and when they take a specific interest in maintaining the vestiges of what was once, I suppose, the strongest and most powerful motor cycle manufacturing industry in the world, although, along with much other manufacturing industry, it has, alas, been reduced to a shred of its former glory. Such people have our added support, but in general, whatever machines motor cyclists ride, they deserve a better deal from the Government. I hope that, even at this late stage, the Minister will try to wrest some justice from an unjust decision.
Mrs. Gillian Shephard : It is interesting and perhaps rewarding to see that at this time of the morning the House can become emotional about this issue. I shall make three main points.
First, I fully accept that, although one third of motor cyclists evade paying vehicle excise duty, that means that two thirds pay it. The vast majority of motor cyclists are responsible, careful and, in view of this debate, very enthusiastic drivers. However, much mention has been made of motor cyclists receiving a raw deal, and swingeing and unfair increases of 50 per cent. have been bandied about. We are in fact talking about increases of £5 a year or £10 a year. They are not inconsiderable sums, but, balanced out over the weeks, they represent 10p or 20p a week which is less than the cost of a packet of crisps. Other people might more easily be able to equate that figure to fractions of the cost of a pint of beer or of a packet of cigarettes. I do not accept that such figures represent swingeing increases that cannot be met.
Secondly, part of our purpose was to restore the balance between cars and motor cycles by raising the VED by a modest amount to bring the two taxes more into line.
Thirdly, part of our purpose was to increase the VED paid by motor cyclists because a result of a decision taken in 1985 to freeze VED has been to reduce the real value to such an extent that the evasion rate has increased
Column 154
unacceptably. As I said, the latest estimate is that one third of all users avoid paying tax, and the consequential loss of £9 million is not inconsiderable. Some hon. Members might applaud the solution of abolishing VED, but to do so would create considerable difficulties in maintaining a vehicle register and making effective insurance and MOT checks.12.45 pm
I made it clear in Committee that it is not our intention to recoup from the honest motor cyclist the revenue lost through evasion, or to penalise the motor cyclist relative to the car driver. Motor cyclists still pay less tax than car drivers in proportion to their share of the cost of the road network.
It is argued that as motor cycles are generally more fuel-efficient than cars, and usually use unleaded petrol, we should encourage their use. My answer is that they already pay considerably less in fuel duty per mile travelled. I do not disagree with the claim that motor cycles cause less wear and tear on the roads than cars, which is why their VED is still, at most, half that of cars.
People choose to use either a motor cycle or a car for a host of reasons, of which the tax payable is only one. Comfort, capital cost, running costs, and safety all play their part in their decision. We have tried to achieve a more neutral taxation regime as between the car and motor cycle, and it is now less weighted towards motor cycles than it was. The increase of £5, or £10 a year at most, is small. The fact that motor cycles cause less wear and tear on the roads is reflected by the low rates of VED that they still attract in comparison with cars. Motor cycles that are more fuel-efficient pay less in fuel duty per mile--and that is another incentive. The proposed increase is modest, and I hope that the House will accept it.
Dr. Marek : The Minister said that the increase is designed to bring motor cycle tax more into line with that charged in respect of motor cars. As far as VED is concerned, the ratio has been fixed for five or six years, but the Government have now altered it, so that motor cycles will attract an increased ratio of road tax in comparison with motor cars.
The Minister justifies that change by saying that motor cycles use less fuel, so she is effectively taxing an environmentally friendly mode of transport. The new tax reflects the Government's anti-green policy, and it is extremely disappointing that they show no regret or contrition, and can offer no logical explanation for their action. Amendment negatived.
Clause 7
Beer duty
Mrs. Gillian Shephard : I beg to move amendment No. 22, in page 8, line 4, at end insert--
"the Commissioners" means the Commissioners of Customs and Excise ;'.
This technical amendment removes any possible uncertainty, and it is one about which I have written to the hon. Member for Newcastle upon Tyne, East (Mr. Brown). It defines the commissioners mentioned in the two freestanding provisions as
"the Commissioners of Customs and Excise".
| Next Section
| Home Page |