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Mr. Paul Goodman: Does the 398,000 figure relate to people living in rural areas, or to people living in sparsely populated rural areas?

Julia Goldsworthy: It relates to sparsely populated rural areas as defined by the 2004 census.

Our amendments recognise that people who live in sparsely populated rural areas rely on cars, and that those people will be hardest hit by any change in vehicle excise duty because they are least able to change their behaviour. They would allow the Government to proceed even further with the "polluter pays" principle, which they failed spectacularly to do in the Budget, without having an unfair impact on those vulnerable groups.

Mr. Goodman: It is a pleasure to see you in the Chair, Mrs. Heal. It is also a pleasure—after listening to some of the Second Reading speeches and some of the speeches that have been made today—to take part in this Finance Bill debate for the first time.

I am sorry that I cannot respond directly to the Economic Secretary, who, in a bold, combative and assertive statement, said that the Conservative party might need a reshuffle after the local elections. I was going to tell him that there might just be a reshuffle in the Labour party. I note the shock on the Labour Benches at the very prospect of that being raised, but I was going to tell the Economic Secretary that whatever might happen in that event, I hoped that he and the Financial Secretary—who is here—would be present in the Standing Committee, because I look forward to the usual exchanges.

I shall return to the Government's proposals when we debate clause stand part. The key to the amendments can be found in tables A and B in clause 13. Table A sets out VED increases for vehicles registered before 23 March—the Liberal Democrats seek to amend that table—and table B sets out the increases for vehicles registered after 23 March.

The amendments tabled by the hon. Members for Falmouth and Camborne (Julia Goldsworthy) and for South-East Cornwall (Mr. Breed) should be put in context. Last Thursday, the leader of the Liberal Democrats, the right hon. and learned Member for North-East Fife (Sir Menzies Campbell), suddenly rushed out what he described as a challenge to my right hon. Friend the Member for Witney (Mr. Cameron) to form what he described as a cross-party consensus on the environment.

The timing of the challenge was a little curious, as I understand that my hon. and right hon. Friends were already holding discussions with the hon. Member for Eastleigh (Chris Huhne), who I see is in his place, about forming exactly that cross-party consensus. We were
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therefore a bit surprised to receive the challenge, whose content was also curious: the right hon. and learned Member for North-East Fife urged my right hon. Friend the Member for Witney to sign up to replacing the climate change levy with a carbon tax—something to which my right hon. Friend had already signed up several days earlier.

5.45 pm

Chris Huhne (Eastleigh) (LD): Will the hon. Gentleman clarify whether the Conservative party's carbon tax proposals extend its application across the board, including to households?

Mr. Goodman: I look forward to doing that in Committee, but I am afraid that I would be ruled out of order today. We are debating vehicle excise duty, to which I turn now.

In respect of VED, the right hon. and learned Member for North-East Fife said:

That is nice and plain, and the hon. Member for Eastleigh helpfully chipped in on Sunday, in a report in the News of the World. It is encouraging to see someone getting into that newspaper for sound and substantial policy reasons. The report stated:

It added:

The report quoted the hon. Member for Eastleigh as saying:

On the same day that their leader made his VED announcement—and at about the same time that I assume that the hon. Member for Eastleigh was talking to the News of the World—the hon. Members for Falmouth and Camborne and for South-East Cornwall tabled amendment No. 25, which we are now considering. Why? The amendment would not impose a whopping great increase in the top rate of VED, but rather a whopping great decrease of some 50 per cent. in some areas.

Chris Huhne: The hon. Gentleman may not be overly familiar with Finance Bill procedures, but if he were, he would know that only a Minister of the Crown is entitled to have selected for debate an amendment that would raise revenue. Last year, my party tabled an amendment in respect of self-invested personal pensions—SIPPs. It could not be debated, but it was nevertheless the only Opposition amendment to be accepted completely by the Government. Before the hon. Gentleman gets too disparaging, I suggest to him that we might achieve the same success with our proposal to raise the higher rate of VED to £2,000.

Mr. Goodman: I shall have a good deal to say about that amendment in a moment, but I thought that Liberal
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Democrat Members were the ones unfamiliar with Finance Bill procedure. I do not see the point of tabling an amendment that cannot be voted on, nor of tabling an amendment that directly contradicts another one.

Julia Goldsworthy: My hon. Friend the Member for Eastleigh (Chris Huhne) referred to the SIPPs amendment that we tabled to last year's Finance Bill. It had more impact than the sum total of all the amendments tabled by the Conservatives then.

Mr. Goodman: The hon. Lady claims that an amendment that could not be voted on made a substantial contribution to last year's Bill, but—

David Taylor (North-West Leicestershire) (Lab/Co-op): On a point of order, Mrs. Heal. Can you advise us whether this metaphysical discussion of the Liberal Democrat party's strategy—or absence thereof—is advancing the debate on the amendments before the Committee?

The First Deputy Chairman: I should be much happier if hon. Members participating in the debate returned to the specifics of the amendments before the House.

Mr. Goodman: I shall return to the specifics of the amendments, (Mrs. Heal) even if I disappoint some Labour Members by doing so.

We have been told why the Liberal Democrats tabled the amendments that we can discuss fully and vote on: households in sparsely populated rural areas have special transport and social needs. People in rural areas who farm or work on the land, it is argued, often need larger vehicles that emit more carbon. That is true, and during the coming days and weeks we look forward to hearing Liberal Democrat Members, who represent urban areas and who have, like the hon. Member for Eastleigh, I am sure, been fully signed up to amendment No. 25 by the hon. Member for Falmouth and Camborne and her colleague, the hon. Member for South-East Cornwall, explain to their urban constituents why they should pay higher VED on the most polluting vehicles registered before 23 March 2006 while people in rural areas pay lower VED on exactly the same vehicles.

We also look forward to the hon. Member for Eastleigh explaining that when he told the News of the World that

he meant to say that if people choose to buy the most polluting cars they must recognise the environmental cost "sometimes".

Chris Huhne: Perhaps the hon. Gentleman does not realise that the rural discount applies only to the bands below top band G of vehicle excise duty. That fully meets his point.

Mr. Goodman: I am aware of that, but I must not be drawn back into metaphysical speculation about an amendment that I cannot describe. Were I able to do so, I would be able to answer the point, but you would rule me out of order Mrs. Heal, so as I do not want to provoke your wrath I shall press on.
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Regardless of the Liberal Democrats' internal discussions, one conclusion is certain. Before seeking to provide special treatment in the Finance Bill for households in sparsely populated rural areas, one needs to be able to provide a robust definition of such households and areas that will hold good in all circumstances—a definition that will stand up to legislative scrutiny.

That requirement brings us neatly to Liberal Democrat amendment No. 22, which was also tabled by the hon. Members for Falmouth and Camborne and for South-East Cornwall. Does the amendment offer such a robust definition? In our view it does not; it simply dumps the problem in the lap of Ministers and would compel them to define, in unamendable regulations to be tabled at a future and unspecified date, households with a postcode in rural areas. Presumably that would take place after the Bill has become law, which raises the question: what would happen to the amendments if they were accepted and the Bill was enacted and became enforceable in the meantime?

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