House of Commons Hansard Debates for 30 Jan 1995

Mr. Peter Bottomley: I apologise for intervening for a second time. The Department of Transport organised an exemption for Dotto trains which allows small trains at seaside resorts to travel for a few hundred yards on the public highway. Does the hon. Gentleman agree that we are not looking for an exemption for a farmer who takes a tractor into a market town on a regular basis; we are talking about journeys of 20 or 200 yd on the public highway? Many people in agriculture do not understand why their vehicles, which will otherwise be used on their own land, should be taxed for such small, infrequent journeys.

Mr. Tyler: Not for the first time, I am grateful to the hon. Gentleman for his intervention. I noticed with great pleasure the pained expression on the face of his hon. Friend the Minister. who has either not represented that view to the Treasury or failed to represent the views of the farming industry--and, for all I know, those of the Ministry of Agriculture, Fisheries and Food as well. Many people believe that schedule 4 should be re-examined, because there has been inadequate consultation about the principles of the changes, let alone their practical implications and the economic effects on certain industries. We will return to that point later, so I will not labour it now.

There are a number of other "apparent anomalies"--to use the Minister's phrase--in the legislation. It has been suggested several times that the changes in the Budget, in the Finance Bill and in schedule 4 are intended to develop environmental objectives in some way. It is simply humbug. There is no environmental reason for increasing

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vehicle excise duty. We should make sure that future tax burdens are applied according to usage of the highway and of scarce resources. Usage, not ownership, is the issue.

It is therefore absurd to increase the vehicle excise duty this year. We should reduce the vehicle excise duty on those vehicles which are modest in their consumption of fossil fuels. It should be possible to reduce the excise duty on the smallest vehicles to £10--just an administrative charge--while at the same time allowing the full weight of the Budget increase to fall on those who use the most fuel.

Mr. Peter Atkinson (Hexham): I am trying to follow the hon. Gentleman's logic. Is he saying that heavy recovery vehicles should pay more excise duty because they use considerable amounts of diesel, and that smaller recovery vehicles which travel many more miles should pay less?

Mr. Tyler: In a normal winter--who knows, we may be experiencing an abnormal one--many of the very large vehicles are on the road for only a short time, and therefore use an insignificant amount of fuel. I know that the hon. Gentleman represents a rural constituency, and I will show how a change of taxation emphasis from ownership to usage could assist his constituents.

The average private motorist in the hon. Gentleman's constituency, as in mine--even taking into account the difficulty of finding alternative public transport--travels only 8,000 or 8,500 miles per year. If that motorist does that sort of mileage in a comparatively modest car of between 1,200 and 1,500 cc and pays only £10 in VED but pays the full increase in petrol and diesel tax, that motorist will save a considerable amount of money. If the Government want to do something effective about the usage of fossil fuels and usage of the highways, they should encourage people to trade down and use modest vehicles more modestly. We will return to that issue at a later stage, but if there is to be any logic in schedule 4, the Government must do something more effective to persuade us.

The Royal Commission on the Environment reported a few months ago to the Department of Transport that the weight of responsibility for cost in terms of maintenance equations, the environment, and so on, is almost twice as much in the case of lorries as is paid in lorry vehicle excise duty. This morning, The Times reported, that despite the industry's claim that it is paying much more than it can afford, truck registrations in 1994 rose an astonishing 23 per cent. over 1993--the highest year-on-year increase on record, in stark contrast to the ailing car market.

That increase scarcely suggests that lorries are over-taxed and will be taxed out of business, even in the recession that is still afflicting so much of our country. Lorries are making less of a contribution to overall road costs, the economy and consequent environmental costs than they should.

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Schedule 4, at best, portrays muddled thinking about transport and energy policy. At worst, it looks like yet another indiscriminate, ill-thought-out and illogical attack on not just particular sectors such as agriculture but the private motorist.

Mr. Bayley: Although the overall increase in vehicle excise duty may be modest in the context of the industry's total bill--a figure of 1 per cent. was suggested--the individual operator of a vehicle recovery service will find the rise staggering. Even under the modified proposal that the Minister considers acceptable, the firm that I mentioned earlier will have to confront a VED increase of more than 200 per cent.--from £1,020 to £3,300.

That will be less of a burden than the original proposal, which would have raised that firm's vehicle duty bill to nearly £20,000, but how does the Minister justify to that small business a 200 per cent. tax increase; and how does he respond to the case made by that firm and by North Yorkshire police, that such firms will reduce the number of their heavy recovery vehicles, which will extend the time that road users will be kept waiting when a heavy goods vehicle breaks down or is involved in an accident?

Earlier this month, the assistant chief constable of North Yorkshire police wrote to me about that matter.

Mr. Peter Atkinson (Hexham): Did he know about the changes?

Mr. Bayley: Of course not, because they were announced only last Friday as a panic measure by the Government when they realised that they had got it wrong with their initial proposal.

If the hon. Gentleman will listen, he will learn that assistant chief constable's comment was relevant before the change and after it. He stated that the duty increase for smaller vehicles weighing under 7.5 tonnes could be recovered by operators because such vehicles are used frequently. However, he added:

"The category over 7.5 tonnes will create a particular difficulty for recovery operators. Throughout the County there are approximately 16 recovery vehicles in this category and their work is extremely limited. They are primarily used for the recovery of broken down and accident damaged heavy goods vehicles, and I am aware that one operator has only used his vehicle on 12 occasions during the past 12 months. Despite this limited use it is imperative that North Yorkshire Police are able to call on this type of recovery vehicle." Nevertheless, the Government are proposing for large vehicles an 800 per cent. rise, from £85 to £750. That represents a substantial increase in the tax burden on operators of large vehicles used only occasionally.

7.15 pm

The Minister recognised that the initial proposal was a mistake. His compromise is a step in the right direction, but not a big enough step. The revenue implications of going the whole hog in my county, which is geographically the largest in England, should be considered. There are only 16 such vehicles in my county, but there will be fewer as a result of the proposal.

Mr. Michael Lord (Suffolk, Central): The vehicles to which the hon. Gentleman refers must be expensive. I do not know the depreciation involved, but can the hon.

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Gentleman say how much the vehicle owner charged in each of the 12 instances mentioned by the assistant chief constable?

Mr. Bayley: The hon. Gentleman makes a reasonable point, in terms of the cost to the individual owner of a recovered vehicle of the extra £670. I cannot recall whether the hon. Gentleman was in his seat when I spoke earlier, but not all owners of recovered vehicles pay their bills. I said that one recovery vehicle was used only eight times during the course of a year, and its owner received payment on only six of those occasions. In that instance, the proposed increase would, if it had been passed on, have added £100 to the charge for each rescue.

Recovery vehicles provide a service to the public in removing an obstruction and opening the road to other users. Surely that is worth something in the Government's terms.

Mr. Lord: I heard the hon. Gentleman's earlier speech, but it strikes me that any business that uses such a vehicle so infrequently must build into its cost structure substantial fees per trip. Otherwise, the business is unlikely to be viable. Therefore, the proposed increase may represent a much smaller percentage of the firm's overheads than the hon. Gentleman suggests.

Mr. Bayley: When the hon. Gentleman intervened earlier, I acknowledged that he made a valid point when he said that the lower rate increase would not represent a huge extra cost, given the overall charges made for vehicle recovery. Is that not all the more reason for the Government to examine its costings in the round? In the case of the vehicle used eight times a year, for which its operator was paid on six occasions, the tax would add £100 per use. Why do the Government not set against that the increased cost of police time spent waiting at the scene of an accident, if the time taken to effect recovery is lengthened because perhaps only eight suitable vehicles will operate in North Yorkshire instead of the 16 that operate at present?

The Government's initial proposal prompted the company in question to cancel the purchase of a new vehicle, which would have cost £100, 000. That obviously led to an immediate reduction in the quality of the service to the public and the county. The second consequence was that the company decided not to go ahead with appointing someone to a job that it had advertised and had planned to fill. The company has 26 employees, so, proportionately speaking, this had a significant impact. Thirdly, the company decided to call a halt to its efforts to get BS 5750 accreditation, because it realised that it had to make savings.

I hope that, as a result of the reduced increases in VED, the company will be able to reconsider some of these decisions. As the Government have admitted that they were wrong in the first place to propose these excise increases, and as the Government, when bringing in the new lower rate for these vehicles, have failed in their objective of simplicity--putting all the heavy goods vehicles on the same rate of taxation, why do they not accept that these vehicles are infrequently used but perform a valuable public service? If there are fewer of them, there will be greater costs to the Exchequer in terms of police time and road blockages.

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The Government's argument is really not worth the candle. For vehicles over 7.5 tonnes, the Government have gone halfway; they should now go the whole way and abandon this increase. The revenue implications will be minuscule. The benefits for an industry on which the Government and the police rely will be considerable. There will also be the benefits of BS 5750 accreditation and of more employment, which the Government say they want. More investment will also go into the industry. All that could be lost if the Government go ahead with this tax increase.

Mr. William Ross (Londonderry, East): This is one of those debates that go beyond the usual political point scoring with which we are so familiar. The Government should pay careful attention to what is said, with the intention of looking again at the proposals.

The Minister drew attention to the fact that most snow clearance, gritting, and street lighting and cleaning vehicles in Great Britain are owned by councils. Not so in Northern Ireland. He will be well aware that all those functions are still under the control of the Department of the Environment. One begins to wonder why the Government should impose a tax which they themselves will eventually have to pay. That does not seem the wisest way of proceeding to raise revenue.

The Minister talked about multi-use machines, but did not spell out what he meant by that. In my experience, many machines of the class that he described are single-use machines, used for gritting or for snow clearance- -or sometimes for both but for nothing else--

Mr. Heathcoat-Amory: I gave a specific example of how a street cleaning vehicle could be exempt from VED when cleaning gutters with its hosepipe but, with a small adaptation--not uncommon with such vehicles--it could put its hose further down under the street and do the same job for the sewer. In the latter case, it would pay full VED. So it could switch in and out of exemption from one day to the next. That is a recipe for evasion, and it would create a bureaucratic nightmare.

Mr. Ross: I can see the problem with that case, but I wonder whether the Government's is the right way of dealing with it. I think they should look for a different solution. In any case, in Northern Ireland, these are all DOE vehicles. Thank God, the Department still owns the sewers--no doubt many in this House and elsewhere wish the same were true throughout the United Kingdom. The fact remains that, in the nation from which I come, these are essentially Government vehicles; now they are being asked to pay tax.

Even when the service is privatised, as it has been over here, the cost will eventually be paid by local government taxpayers. Who pays for snow clearance? The road authorities do. Eventually, therefore, local government taxpayers will foot the bill. This is thus a rather sneaky way of placing an unjustified burden on those taxpayers. As we know, it can be snowing in the north of England while the sun is shining in London, at the same time as the south-west is being washed away.

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Had the Minister been with me in the plane today, he would have seen a great deal of England under water--

Ms Primarolo: Would a boat count as a recovery vehicle?

Mr. Ross: Certainly a boat would have been more suitable had the journey been made on the ground.

This measure has not been properly thought through, and the Government should go away and reconsider.

As the House will know, I have long been associated with agriculture, about which the hon. Member for North Cornwall (Mr. Tyler) spoke earlier. The difficulty is that many farm vehicles, especially tractors, are used only rarely and for short journeys. A farmer in the summer does not take his tractor down the road to look over the gate at the sheep or cattle: he drives a car. The car is taxed. He takes it because it saves him time and is cheaper. In winter, he will transport fodder to his livestock, which may be only 20 yd away or up to a mile away, two or three times a week-- although it may be less often because the cattle may have been moved closer to the farm or even indoors. His farm vehicle thus makes the journey to and from the cattle extremely rarely.

Many farms have more than one tractor. One may be used on longer journeys, and thus be taxed in the usual way, while another is kept to do runabout jobs on the farm. That saves the farmer money, and is quite justified in the circumstances. It all depends on whether a farm is traversed by public roads or by a private road or lane. In the latter case, the need to pay tax is practically non-existent. The Government should bear that in mind, too.

The final problem is that, whereas privatised road cleaning services may be able to recover their extra costs by putting up their prices, farmers cannot just say, "I've got to pay higher tax, so I'll need another pound for this lamb, friend." They can only make what the market will pay them--a fact that the Government appear to ignore.

I was astonished to hear the Minister say, in the context of recovery vehicles, that there was no implication for road safety. There is always a road safety implication when a broken-down vehicle is on the road, especially at night.

Last Friday, I tried to cross the Glenshane pass, which reminded me of the road to Basra at the end of the Gulf war. There had been two hours of wet snow, and the road was in an horrendous condition. I spent an hour admiring the surrounding hills--I could well have done without that--before we got through. The snow cleared up after a couple of hours, but at least two vehicles were off the road by then, and they were not going to be lifted out by a light recovery vehicle. It was clear that a heavy one would be needed.

The hon. Member for Bristol, South (Ms Primarolo) described the difficulties very well. These vehicles are very much needed--sometimes only rarely--and are essential to our road system.

The economics of the operation was raised. I believe that whether an operator of heavy recovery vehicles will spend £100,000 or go out and buy a second-hand or

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third-hand vehicle for a fraction of that cost depends on the amount of use that he expects to make of it. Those people are business men. They can count.

We all know that, in one part of the country, such a vehicle may be needed every day--certainly every week--but in others it may be needed half a dozen times a year and no more than that. In those circumstances, it will be an extremely heavy burden on the individual concerned. If the tax goes up to several times its present rate, there will be a knock-on effect on insurance costs. It may be small for an individual vehicle, but there will inevitably be a rise in insurance costs to cover increased costs, and, of course, there will also be the VAT, which I assume will be added, for the service of taking out the recovery vehicle and using it.

7.30 pm

The Minister said that it would raise only 1 per cent. The implication is that 1 per cent. is an absolutely tiny sum, scarcely worth thinking or bothering about. If so, why does he bother about it? Why does not he go away and forget about the tax for a year? He should listen to what is said this evening and no doubt to what will be said in Standing Committee. After that, he could come back with a regime that is more easily defendable than what is before us this evening.

The reality is that a number of completely obsolete vehicles are mentioned in the proposed legislation. The Minister does not have to worry about them. Nobody is breaking the law. The vehicles do not exist, so by definition the law cannot be broken. He could wipe them out at any time, and nobody would be too concerned. The mere fact that the present legislation has lasted so long says an awful lot for those who framed it. It would seem that they got it very nearly right.

I suspect that, if the Minister goes ahead with the proposed legislation, not only will he be unpopular but he will be back here again in a year or two trying to dress up the mistakes that the Government are currently making.

Mr. John Hutton (Barrow and Furness): I support the amendment proposed by my hon. Friend the Member for Bristol, South (Ms Primarolo), for two simple reasons: first, clause 15 and schedule 4 raise a question mark about the extent to which the Government have seriously taken on board some of the road safety and road traffic issues that Opposition Members have raised; and, secondly, there is a genuine case for reviewing the parts of the Bill that relate to changing vehicle excise duty on heavy recovery vehicles, because of the burden that the duty changes will place on many small businesses.

I was intrigued by some of the Minister's earlier remarks. He said two things that particularly caught my attention: first, that this part of the Bill is necessary. The hon. Member for Londonderry, East (Mr. Ross) made it clear that the amounts being raised by the Government are very small, and some people might conclude, as he did, that therefore it is an argument that is not worth having at all. Secondly, he tried to make the case that the changes were necessary because the existing legislation was in a mess-- it was confusing and complex and few people understood it.

Anyone involved in law making and applying the law wants to see Parliament make law that is comprehensible and sensible. That is not what the Government propose. That is particularly true of some of the changes being

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made for vehicle excise duty on road recovery vehicles. At the moment, there is a simple provision in legislation in the Vehicle Excise and Registration Act 1994, which specifies the rate of duty that those vehicles are to be charged. That will be replaced by a considerably more complex range of provisions, which is unlikely to see an end to the complex litigation and expensive law actions that have pursued that area of the law in the past.

I shall comment not only on road recovery vehicles but on the proposed exemption for emergency vehicles, or 999 vehicles, as the Minister described them.

Paragraph 3A of schedule 4 is to be inserted into schedule 2 of the 1994 Act, to create a new category of exempt vehicles. Many hon. Members, on both sides of the Committee, will be quite surprised to learn that police vehicles are not already exempt from vehicle excise duty. I support the extension of the category of exempt vehicles in section 5 of the 1994 Act to include that category. That is long overdue and sensible. The Government's intentions are clear from paragraph 3A--it is clearly designed to exempt police vehicles from paying vehicle excise duty. But there must be a question mark over whether the amendments proposed to schedule 2 of the 1994 Act will achieve the Government's objectives.

Schedule 2 is to be amended by the insertion of a new paragraph 3A, which says:

"A vehicle is an exempt vehicle when it is being used for police purposes."

The Minister said that that was designed to include 999 emergency vehicles to the concept on an exempt vehicle not liable to vehicle excise duty. I do not think that is what the Government have achieved.

I bring to the Minister's attention two problems with paragraph 3A. He may not be able to respond to these points tonight, but I hope that he is listening. First, there is no definition of "police purposes" for the purposes of the new paragraph. Secondly, there is no definition of what is a police vehicle. I should have thought that both problems were fundamental. If the Government simply propose an exemption for 999 emergency vehicles, is that what they have achieved? What about a range of police vehicles that are not used in 999 emergency situations, for example, vehicles that are used to transport prisoners to and from a magistrates court to prison? Will they be covered by the new paragraph 3A?

I used that example, because from the existing legislation that relates to the definition of police purposes--we could use section 25 of the Road Traffic Act 1960 and section 79 of the Road Traffic Regulation Act 1967--it is clear that both of them relate to emergency situations: when a police vehicle is attending the scene of a crime or an accident and must exceed the speed limit for that area. Clearly, not all police vehicles are designed or used for those emergency scenarios, so where does that leave us? If we look at existing case law that relates to both statutory provisions, we are unlikely to have much assistance. Therefore, no definition in existing case law appears to be of any great assistance to us.

Perhaps a more fundamental problem for the Government is that there is no definition of what is a police vehicle. That is strange. Other emergency vehicles, for example, fire engines and ambulances, which are already exempt under schedule 2 of the 1994 Act, are pretty comprehensively defined in schedule 2 of the 1994 Act. The Minister may not be aware of those definitions,

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but if he cares to look at schedule 2 of the Act, he will see in paragraphs 4, 5, 6 and 7 a pretty comprehensive and impressive definition of what those emergency vehicles are.

Why is there not a similar definition of a police vehicle for the purposes of the new exempted category of vehicles? Surely a paragraph such as paragraph 5 is capable of being used without any great intellectual effort to apply to the concept of a police vehicle. I wonder whether the Minister might consider at some point having another look at the new schedule and including in it some reference to the fact that the vehicle exempted from excise duty should not be a vehicle that is kept or operated by a police authority. Surely that is what the Minister intends this part of the Bill to achieve. Sadly, it is not what the Bill does.

I shall give the Minister three examples of where there might be a problem with police vehicles. First, what will happen if a police authority wishes to hire or rent a vehicle to enable business to be done by the police authority? It is not uncommon to see police stickers on the sides of vehicles that are, in fact, used to transport stores. Under the Bill as it stands, will such vehicles be exempt from vehicle excise duty? Are they being used for police purposes? They are not actually owned by the police authority. Presumably, the company that owns such a vehicle--Hertz, for instance, or Eurodollar--will be able to ask for a rebate from the Inland Revenue or Customs and Excise, saying that the vehicle has been on contract hire to a police authority and that paragraph 3A of the new schedule to the 1994 Act should apply.

Secondly, what about the use of private vehicles commandeered by constables --or police officers of other rank--to respond to emergencies? Although we hope that such vehicles would be used for only a short time, in theory an owner could claim that his vehicle was being used for police purposes during that time. Do the Government want owners of private vehicles to be able to claim exemptions from vehicle excise duty? Probably not; in which case, why does not the Bill make it clear that only vehicles kept or operated by police authorities will be so exempted?

Schedule 4 is a complex provision, but it does not refer to earlier legislation dealing with police authorities, police vehicles and police purposes. That is not good enough. The Minister rightly described the law as complicated, and said that the Government wanted to simplify it; that is fine, but I fear that this part of the Bill will represent three cherries on the fruit machine for lawyers. I do not think that Members of Parliament are in the business of handing the prospect of expensive litigation to well -paid lawyers, when we can get our legislation right and make it simple.

The third problem involves prison escort vehicles. The Government have emphasised the need to privatise some of the escort services transferring people between prisons and courts. I do not wish to become involved in the merits or otherwise of their policy now; but could it not be argued that vehicles carrying remand or convicted prisoners between prison and court are acting for a police purpose, in the context of new paragraph 3A? Could not a private operator such as Group 4, which has won contracts in Humberside and the east midlands, argue that because police authorities are currently using its services, those services are being used for a police purpose?

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Opposition Members do not wish to cause difficulties for the Government on this issue, at least; but let us be certain about the vehicles that we are exempting. The Government could tighten the drafting of the Bill with very little effort. The definition of police purposes could be refined if we inserted a provision to the effect that the vehicles involved need to be operated or kept by police authorities: that would limit exemptions to the category that the Government probably had in mind.

Amendment No. 12 also raises road safety and traffic issues. The Government have clearly had a change of heart, seeing the force of the arguments against them, which have been deployed again tonight: it seems probable that the duty will now be substantially less, and we welcome that. The proposed changes will, however, have an impact on heavy road recovery vehicles in my constituency in south Cumbria. It has often been said that my constituency lies at the end of the longest cul de sac in Europe. I think that that is something of an exaggeration, but it gives a flavour of the sense of geographical isolation felt by many of my constituents. The bulk of the incoming traffic comes down the A590, which is an awful road; however, there are not many garages or other small companies running heavy vehicle recovery services in the area. I believe that there is a risk that the Government's proposed changes to vehicle excise duty legislation will jeopardise the provision of any such services. I put it no higher than that, but the Government must take the risk into account.

The Minister said that the Retail Motor Industry Federation was happy with the changes, but I should be interested to know how many small companies and garage operators have been consulted, even about these particular changes. Certainly, many small employers in my constituency are still extremely concerned about the impact of the measure on their businesses.

7.45 pm

In a very articulate letter, one of those small employers urges me to vote against the Government tonight. It will surprise no one when I disclose that that is exactly what I intend to do. My constituent, Mr. Bob Grieve, makes his case against the Government's proposals very clearly, writing:

"the new rates would force some operators out of business with others opting out of HGV recovery altogether;

many parts of the country would end up with only limited capacity for removing broken down or accident damaged heavy lorries from our roads, leading to longer delays in road clearance and raising the question of public safety."

That, I feel, is very pertinent to the interests and needs of my constituents.

My constituency is remote, and is served by only one major road. It is 40 miles from the M6, and even further from larger centres where there are other garage service providers. We are heavily dependent on local providers of HGV recovery services. I see no reasonable justification even for the modest changes that the Government propose. The law as it stands is very simple, and given what my hon. Friend the Member for York (Mr. Bayley) said about the few occasions on which heavy vehicles are used, I feel that there is obvious justice in keeping that law in place until we have had an opportunity to examine some of the wider issues raised by the proposed change.

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I hope that the Government will re-examine the provision in schedule 4 that exempts police vehicles from vehicle excise duty, and ask whether there is scope for improvement in the drafting to specify the exempted vehicles more accurately.

Mr. Mike O'Brien (Warwickshire, North): I congratulate my hon. Friend the Member for Barrow and Furness (Mr. Hutton) on a fascinating speech, and particularly on what he said about police vehicles.

I should first declare that I am a parliamentary adviser to the Police Federation, although I have no particular brief from the federation tonight. While listening to my hon. Friend, I thought of two more issues that might arise in regard to police vehicles unless the Government provide the clarification that he rightly demanded: given all-party interest in the matter, the Government should accept the need for such clarification.

I refer to conditions affecting unmarked surveillance vehicles. Such vehicles raise all sorts of questions in relation to when they are used. Some of them are quite old and, for obvious reasons, their dilapidated state is intended to make them less conspicuous. Some police officers, especially those in rural areas, drive home at night in police vehicles and return to work in them the following day. Obviously, when an officer is driving home he is not using the vehicle for a police purpose for which it is normally used. There is an obvious need for clarification.

My main objective in the debate is to raise the concerns of constituents who came to see me in my surgery. Harvey and Madeleine Wasson own Harvey's Recovery and Repairs of Exhall in Bedworth. Mrs. Wasson recently came to see me because she was concerned about the Government's proposals on vehicle excise duty. The company owns seven vehicles and has three employees. The husband and wife also work in the business. They were appalled by the proposals because they had just bought a four-axled vehicle of the type which is to be taxed at the highest rate. It was obtained at considerable sacrifice and they anticipated that the vehicle excise duty would be £85. They have suddenly found that it will be about £5,000.

I accept that, to some extent, the Minister has listened to representations from the industry and from hon. Members, including me, in all parts of the House because there is an alternative proposal considerably to reduce the tax on these vehicles.

Mr. and Mrs. Wasson have a good business but it is by no means making them millionaires, and the Minister should consider what he is doing to that couple. He is proposing to raise VED on their vehicle by about 800 per cent. That is a massive and unacceptable rise and the Minister should think seriously before going ahead with it. Large recovery vehicles perform a public service. Without them, or with a reduction in their number, there would be increased congestion on our motorways and an increase in the cost of police and other time in dealing with accidents. If the only benefit to the Exchequer is a 1 per cent. increase in the take from VED it will be far outweighed by the extra expense of traffic congestion and more police inconvenience. The Minister should consult further.

I agree that the Minister has made considerable concessions, but why at the last minute has he had to amend his proposals? The reason is that he had not

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consulted properly. His civil servants do not seem to have given him the detailed advice on which Ministers have to rely about the market in which heavy recovery vehicles operate. He did not seem to understand that the market would be damaged and he had to amend his original proposals.

My hon. Friend the Member for Barrow and Furness (Mr. Hutton) outlined other inadequacies in the Bill. The Minister should accept, as he has already accepted to some extent because of his climbdown on VED, that he has not properly consulted or has inadequately considered some of the effects of the proposed changes. He should consult properly with industry and councils that will be affected, look in detail at the impact of his proposals, and consider the reality of the market. If he does that, he will find that his proposals will reduce the availability of heavy recovery vehicles and he will change his mind on some of the detail. We ask only for consultation. The Minister got into a mess by not consulting and his proposals are the result.

Mr. George Stevenson (Stoke-on-Trent, South): I should like to hear more from my hon. Friend about the use of the word "concessions". There is a danger of us falling into a trap. The Government set outrageous objectives and in a state of sheer panic they reduced them and claimed that they had made concessions. The Minister said that the trade welcomes these concessions. Of course it does, but that is because of the outrageous figure that was first proposed.

Mr. O'Brien: I entirely agree with my hon. Friend. I was about to come to that issue. The Minister said that the trade associations have accepted the "concessions". That is not surprising, because, matters could have been far worse. However, my constituents will not welcome the damage that will be caused to the small business which they struggled to establish by an 800 per cent. increase in VED. That is unacceptable. Such vehicles are rarely used and any extra burden placed on small businesses is damaging. The Minister should think carefully before imposing it.

The Wassons have told me that they will not go out of business if the changes are imposed, but they think that they will have to lay off staff and will probably get rid of the biggest vehicle. The Government should try to prevent them from doing that by changing the proposals. Our amendment asks merely for consultation. It is accepted that the various exemptions have many deficiencies, but people do not accept that the Government have found the correct way to deal with difficulties that have been around for a long time.

The proposals will be costly and are potentially damaging not only to the police and businesses but to everyone who uses our roads. The Minister should accept that the Opposition have made sensible suggestions on various issues and he should agree to consultation. That would be reasonable and it would mean that we would not have to press the matter to a vote.

Ms Primarolo: In opening the debate the Minister explained why there was a need to restructure vehicle excise duty. He said that there were anomalies, that the system was complex, and that we needed to make arrangements to simplify and ease understanding of the duty. As we have heard, the Government proposals do

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anything but that. They replace one nightmare of anomalies with a series of other anomalies. That point was ably made by my hon. Friends.

The Government claim that their proposals are good taxation and that they need to press ahead with them. They are doing that for the sake of, initially, a 1 per cent. increase in revenue. He fails to understand, however, that he started with a bad proposal, that he has amended it slightly so that it is not as bad as it was, but that it is still based on premises that are incorrect. It is hardly surprising that the Road Rescue Recovery Association is prepared to accept a reduction as a concession, when it was threatened with such a massive increase.

Companies are still faced with a massive increase in taxation and draw on resources, even as a result of the concessionary rates that the Minister has announced this evening. For instance, Link Assistance in North Yorkshire, which is paying an excise bill of £1, 020 a year, and which is looking at a possible bill of £19,740 on the originally proposed rates, will find, even with the concession, that its taxation will be increased by £9,000.

In the debate, Labour Members have repeatedly said that the Government scheme is ill thought out. The increased costs will be transferred from the Government to either the private motorist or car user. They will be absorbed by companies or passed on to the consumer. It is simply not acceptable that the Government should behave in that way. My hon. Friends have made that case.

In echoing the points about road safety, the hon. Member for Londonderry, East (Mr. Ross) made clear the particular variations in Northern Ireland. He asked why we cannot if the scheme is so badly thought out, pause, undertake the review and bring back the proposals next year. It would be worth forgoing the 1 per cent. increase in revenue if the scheme were in place and operating correctly. 8 pm

In a detailed and knowledgeable speech, my hon. Friend the Member for Barrow and Furness (Mr. Hutton), who has obviously, in his bedtime reading, compared the Vehicle Excise and Registration Act 1994 with schedule 4 of the Bill, made clear the definitions of a police vehicle, its purposes and the varying purposes that would count under the definition. Again, he raised the point about the prison escort service. If those points have not created further anomalies in this so-called clear and simplified system, I do not know what will, or how the Government will understand the mess that they are getting themselves into.

My hon. Friend the Member for Warwickshire, North (Mr. O'Brien) echoed the points about road recovery difficulties. The Minister has not said whether the arrangements that he has announced tonight will be permanent, or whether they will stand simply for the next 12 months. He has not said that, in next year's Finance Bill, we will not face another debate on an incremental increase on the vehicle excise duties of all the vehicles that we have discussed this evening. Why not stop? Why not undertake the review? Why not undertake proper consultation instead of last-minute, knee-jerk reaction, and come up with a decent scheme for vehicle excise duty which deals with anomalies and which gives us a firm foundation to tax? That is a good taxation policy.

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