Finance Bill

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Mr. Boateng: I am happy to give the first assurance, but I am unwilling to give the second.

Mr. Jack: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 ordered to stand part of the Bill.

Clause 16

Vans registered on or after 1st march 2001: rates of duty

Question proposed, That the clause stand part of the Bill.

Mr. Chope: I wish to ask the Financial Secretary a couple of questions. Are there any vans on the market in the United Kingdom at the moment that would qualify under the clause? If there are, why are we saying that someone who purchases such a van before 1 March next year will never be able to qualify for reduced VED? Surely, anyone who is a pioneer and acquires a van that is environmentally friendly ought

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to benefit from the reduction in VED. I should be grateful if the Financial Secretary would respond to that point.

Chris Grayling: I have a couple of quick points to make. I would be interested to know whether the Financial Secretary is considering the extension of the clause in future Budgets. I say that because there is quite an extensive range of emission levels provision for most cars, and we are now seeing significant changes in the van market. As part of a recent Select Committee visit to Japan, I visited the Japanese Electronic Vehicles Association. It had on display the first of what I believe will be quite a substantial market for a new generation of low-emission vehicles that are not yet freely available in this country.

As time goes by, we shall see more alternatives on the market, and more contradictions between relatively high-emission and relatively low-emission vehicles. Although the Government are putting forward a framework for cars that offers a significant range of incentives to purchase different sorts of vehicles, the same is not yet true of the van market. I should be grateful if the Financial Secretary would confirm that the Government might consider adjusting the very simple band structure as the market develops to reflect the broader range of vehicles that will be available.

Mr. Boateng: The purpose of the clause is to establish a new lower rate of vehicle excise duty for vans meeting the Euro IV emissions standard to which I referred earlier. That is designed to offer an incentive to manufactures and purchasers to market and buy brands that meet the higher emission standards that will come into effect between 2005 and 2007. The clause provides that, from 1 March 2003, all newly registered vehicles that meet the Euro IV emission standard will pay a lower rate of duty of £105.

The hon. Member for Christchurch asked why we could not introduce the change before March 2003 to benefit those at the vanguard of progress. [Interruption.] I am glad that the hon. Member for Arundel and South Downs (Mr. Flight) picked up on that—quick off the mark, as ever. I can understand his point, but, sadly, to be a pioneer is not always to reap the benefits that follow. The Driver and Vehicle Licensing Agency needs time to set up systems that capture information not currently held on the vehicle record, and it must come to an agreement with manufacturers and traders on how that can be done.

We are introducing the new rate as quickly as we practicably can. We do not currently capture information on the vehicle record of the Euro standard, and it is not easy to identify vehicles without it. However, we will be able to do that once the clause takes effect. I do not know exactly how many such vans, if any, are on our roads; there may be some.

Rob Marris: Does my right hon. Friend agree that electric milk floats, of which there are thousands, will come under the category?

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Mr. Boateng: I do not know that they come under category Euro IV. They are no doubt worthy vehicles, and they already receive some benefits. I cannot see how the benefits could be extended to any Euro IV vehicles out there.

Mr. Flight: One understands why it is not practical to give the rate now, as everything must be in place, but if, after March 2003, existing vehicles meet the requirements, it seems unreasonable that they should not qualify for the new rate when in place—that was the second part of the question of my hon. Friend the Member for Christchurch. As I understand the clause, those vehicles that had not qualified on first registration will not qualify for the concession. Once everything is in place, if a vehicle meets that requirement, will it qualify?

Mr. Boateng: That is a perfectly legitimate question. I should like to know whether any technical obstacles would prevent such an extension. I shall examine the issue.

A few hybrid vans meet the Euro IV standard. We do not know the number as there is no means of identifying them exactly. I do not know whether milk floats will be among them; certainly, electrical vehicles are exempt from VED, and most milk floats are electrical. I hope that that explanation of the clause, and my willingness to consider finding a way around a technical hurdle that would not impose undue expense or burden on the Exchequer or fiscal authorities, will enable hon. Members to give the clause a fair wind.

Mr. Chope: I am grateful to the right hon. Gentleman. He says that he will consider whether vans that qualify but were registered before 1 March next year will subsequently qualify for the concession. I should be grateful if he would say whether he will report to Committee members in sufficient time to enable us to consider whether we should revert to the matter on Report.

The Financial Secretary will probably know from his own constituency correspondence that many people who had acquired cars that should have qualified for reduced duty under the measure introduced for low-emission cars registered after spring 2001, would never be able to claim the reduced duty because they had purchased their cars in the previous six months or so and registered them before 1 March 2001. Bearing in mind that experience, the frustration that was caused and, frankly, the inability of Ministers to satisfy constituents who were adversely affected, I should be grateful if the Financial Secretary would reconsider the matter. The burden could be put on the car or van owner to supply the relevant information to the DVLA. With the help of the car manufacturer, it should all be available. Surely, we must be able to come up with a system that allows people who own vans that qualify under the scheme to benefit from it after 1 March next year, even if they acquired their vans prior to that date. I hope that the Financial Secretary will report on that before the end of the Committee, so that we can consider whether to revert to it on Report.

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Mr. Boateng: I hear what the hon. Gentleman says and shall write to him and other Committee members. However, I do not want to hold out too much hope. If Ministers could not satisfy the concerns about a category of vehicles in the past, and they will not, it may well be that we shall not be able to satisfy concerns about this category of vehicles either. One must not add undue administrative or financial burden or still more complexity to the system. As I said in my opening remarks, to be a pioneer is in itself a satisfaction, and that may have to be enough. However, I shall explore the issue and write to hon. Members.

Question put and agreed to.

Clause 16 ordered to stand part of the Bill.

Clause 17

Disclosure of information for vehicle excise duty exemptions

Question proposed, That the clause stand part of the Bill.

Mr. Boateng: The purpose of the clause, which I shall introduce briefly, is to improve the vehicle relicensing service for disabled motorists and the keepers of vehicles used by disabled persons. Disabled people in receipt of certain qualifying benefits may be entitled to an exemption from vehicle excise duty. Proof of their disability allowance is in the form of a certificate issued by the Department for Work and Pensions or the Ministry of Defence, as appropriate, which must be produced when relicensing—that is, obtaining a nil licence—at the Post Office or DVLA regional office.

The provisions in the clause are a prerequisite to obviating the need for a certificate to be produced when relicensing. They are part of Government proposals on e-licensing, in which the intention is to establish by 2005 the opportunity for all motorists to relicense by internet or telephone.

I believe that all members of the Committee will welcome the measure. Generally, it is an important step forward for e-business, but it will be particularly welcome to those living with disabilities. They have quite enough burdens to bear already, without having to engage in existing relicensing procedures. The more that we can do to relieve them of those burdens, the better.

Mr. Mark Field (Cities of London and Westminster): Has the Financial Secretary given thought to precisely what the qualification will be for a disabled person? He mentioned provision through Government Departments. However, an increasing number of individuals are able to get disabled licences for their vehicles through their local authorities. Is it envisaged that the qualification will be such that a large group of disabled people will qualify under the provision, or do the Government feel that it should be a fairly small and tight group based on central, rather than local, Government provisions?

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Mr. Boateng: Our feeling is that a certificate, which will pick up those entitled to that particular exemption, should be issued by either the Department for Work and Pensions or the Ministry of Defence.

Question put and agreed to.

Clause 17 ordered to stand part of the Bill.

Clause 18

Motorcycles (and motorcycle trade licences): rates of duty

Question proposed, That the clause stand part of the Bill.

Mr. Boateng: The purpose of the clause is to reform the structure of vehicle excise duty for motorcycles better to reflect the benefits that motorcycles offer, particularly where they substitute for cars. It contains a new structure of four tax rates based on engine size, which reflects the outcome of a major public consultation. I am sure that there is not a member of the Committee who has not received correspondence in the course of the past year on that issue, which excited a great deal of attention, particularly in the specialist press.

10.30 am

At the time of last autumn's pre-Budget report, the Government published a consultation document on the objectives of the new motorcycle VED system and the structure that would best achieve them. The consultation document attracted more than 12,000 responses, and in creating the new structure set out in the clause we have listened to the respondents. Motorcycle groups have warmly welcomed the new VED structure. One of the main motorcycle publications, ''Motor Cycle Fleet News'', said:

    ''We'll buy you a pint Gordon.''

It is all heart, and no doubt the pint would be from a small brewer, although I do not want to excite the interest of Opposition Members on that issue.

On the basis of those responses, we are proposing a new structure of motorcycle VED that not only reflects changes to the structure of the motorcycle fleet, but seeks to encourage smaller motorcycles, which bring congestion and climate-change benefits when used in place of cars. Under the new structure, there will be four tax bands based on engine size rather than the existing three bands. For many motorcyclists, rates of duty will fall by as much as £35, reflecting the principle that vehicle taxation should reflect use and environmental impacts rather than ownership. In total, some 600,000 motorcyclists will pay less duty under the new system.

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