Finance Bill


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The Economic Secretary to the Treasury (Kitty Ussher): It is a pleasure to speak under your chairmanship, Sir Nicholas.
I understand we are taking the clause stand part debate together with the amendment tabled by the hon. Member for Putney, so I will deal with all the questions that she asked. First, and perhaps most to the point, she asked why the clause was being introduced at this time. She is right in inferring that the purpose is to ensure that motorists pay the appropriate level of VED when rates are pre-announced, which provides an incentive for people to attempt to re-license before the date on which higher rates are introduced. Our intention is to make that harder in the interests of the taxpayer.
Justine Greening: I am grateful to the Economic Secretary for her explanation about communication via electronic means. However, the clause suggests that that is the only means available. It does not refer to other means. I press the hon. Lady on whether other means can be used, because, as she said, most people do not use electronic means to renew their licence.
Kitty Ussher: I will quadruple-check that we are absolutely sure. We have triple-checked, and are absolutely sure. For the record, there is absolutely no intention to set conditions to make the take-up of electronic services mandatory. Such take-up may occur—perhaps it is the use of the word “may” that is key—and those means should be used in parallel with existing paper-based channels.
Mr. Field: Will the Economic Secretary indicate whether an administrative charge is paid by a licence holder when applying for a rebate?
Kitty Ussher: I understand that that is not the case.
Mr. Peter Bone (Wellingborough) (Con): There is effectively a charge, because complete months are required. If a licence is surrendered halfway through a month, half a month’s rebate is lost. People would not readily do that. I am interested to see whether the Economic Secretary will go on to explain the anticipated loss of revenue, if the existing conditions were to continue.
The Chairman: It would be helpful if the Economic Secretary could speak up a little.
Kitty Ussher: I shall shout over the light bulb. I am tempted to make jokes about how many MPs it takes to change a light bulb. Obviously we need more MPs than we have in Committee—and the Finance Bill Committee is a large one. I think that I answered the hon. Gentleman’s point about revenue loss by explaining what we thought the evasion rate and losses were. That is why we are tightening up the measure.
Mr. Bone: I was not talking about evasion, which is different—it is an illegal act. I thought that the Economic Secretary was talking about avoidance by surrendering early, which is legal. That is the loss that I was trying to quantify.
Kitty Ussher: I apologise to the hon. Gentleman, as I misunderstood him. I do not have that figure to hand, but I will provide him with it if it is available.
Mr. Field: I find the Economic Secretary’s reply, and the underlying basis of the clause, insidious. In essence, it is in the nature of taxation that individuals should be able to go about their business, and avoid paying large amounts of taxation, if they wish to do so. I accept that this is a small taxation measure, but none the less a car owner who sees that there is to be a large increase in the tax due as vehicle excise duty, should be entitled to make arrangements accordingly. In other words, if that taxpayer is only seven twelfths of the way through the mandatory year-long licence regime imposed by the Government, it should be within their rights to seek a rebate for the remainder, then take out a new 12-month licence just before the rise is put in place. That insidious situation is one reason why I asked about administration charges. It is insidious that the Government should effectively blocking this off in the name of what they regard as avoidance, or even evasion.
Mr. Bone: My hon. Friend is making a strong and powerful point, with which I entirely agree. Since the Government could bring in VED increases in immediately to avoid that situation if they wanted, all this legislation is unnecessary.
Kitty Ussher: rose—
Mr. Field: My hon. Friend the Member for Wellingborough was intervening on me, but I will give way to the Minister.
Kitty Ussher: In responding to the intervention from his hon. Friend, would the hon. Gentleman clarify whether it is Conservative party policy to introduce VED rates immediately?
Mr. Field: Naturally, we are not here to make Conservative party policy on the hoof—particularly not my hon. Friend the Member for Wellingborough or myself. We were trying to make a serious point about our concerns: it is a relatively small financial issue, but quite an important issue of principle.
Given the strict regime of a 12-month period, if people sell and buy cars mid-year, the taxpayer has the right to be entitled—I suspect that a relatively small number of car owners would, from the Government’s perspective, seek to take advantage of the measure—to a rebate on their current tax disc, then take out a new one to avoid paying a substantially higher charge under the new duty regime. I am not terribly convinced that the Government would face a massive administrative problem in that regard. A huge amount of money would not necessarily be lost to the Government, from their own perspective. This is yet another intrusion on the individual, who should be allowed to ensure that they can organise their personal and financial affairs in a way that is not necessarily to the convenience of the Government, and would not maximise Government revenue.
Mr. Bone: I endorse everything that my hon. Friend has said, and I would resist the clause on the grounds that the Government have given us no indication of the revenue implications. We are creating a lot of totally unnecessary new regulations. The existing system works perfectly well, and unless the Government intend in future years to make massive VED increases, which would cause a significant loss of revenue to the Exchequer, I can see no reason to proceed with the measure. It is an unfair restriction on taxpayers’ ability to plan how they pay their tax.
Justine Greening: We have had an interesting debate, and my hon. Friends have raised some well-made points about the intention behind the clause. I have no doubt that the massive rises in VED that some people face this year will make them want to renew their vehicle excise duty early to minimise the tax that they pay.
3 pm
As I said in my opening comments, I am concerned that it will be quite difficult for the Government properly to enforce the measure anyway, and people will have all sorts of perfectly valid reasons that do not come under these categories for renewing tax discs early. I do not think that the Economic Secretary has set out the case particularly well for going ahead with the measure. I am happy to withdraw the amendment, but I would like to divide the Committee on clause stand part. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question put, That the clause stand part of the Bill:—
The Committee divided: Ayes 14, Noes 6.
Division No. 15]
AYES
Blackman-Woods, Dr. Roberta
Blizzard, Mr. Bob
Chapman, Ben
Efford, Clive
Hall, Patrick
Hesford, Stephen
Joyce, Mr. Eric
Kennedy, rh Jane
Morden, Jessica
Palmer, Dr. Nick
Simon, Mr. Siôn
Thornberry, Emily
Todd, Mr. Mark
Ussher, Kitty
NOES
Bone, Mr. Peter
Breed, Mr. Colin
Field, Mr. Mark
Greening, Justine
Hoban, Mr. Mark
Newmark, Mr. Brooks
Question accordingly agreed to.
Clause 138 ordered to stand part of the Bill.
Clause 139 ordered to stand part of the Bill.

Schedule 45

Vehicle excise duty: offence of using or keeping unlicensed vehicle
Amendment proposed: No. 313, in schedule 45, page 416, line 29, leave out ‘the dwelling’ and insert ‘it’.—[Kitty Ussher.]
The Chairman: With this is will be convenient to discuss the following: Amendment No. 352, in schedule 45, page 416, line 34, at the end insert—
‘(c) any place which is not within the curtilage of a dwelling house and is—
(i) privately owned, and
(ii) used for the purposes of keeping a vehicle subject to private arrangement.’.
Government amendments Nos. 314 to 315.
Justine Greening: May I ask the Minister to quickly run through the Government amendments? I can see that they possibly just tidy up phraseology, but it would be helpful to get on the record the reason why the Government have tabled them now, and why they were not incorporated in the Bill when it was published.
Amendment No. 352 arises from my concerns about the schedule. On the face of it, it is an anti-evasion measure that will increase the authorities’ powers to remove cars that are off-road if road tax has not been paid or if a statutory off-road notification has not been provided. I am concerned about the extent of those powers and the absence of increased responsibilities in the Bill for those who will exercise them. My proposal seeks to encourage the Minister to be more prescriptive and specific regarding the powers available to the enforcers of road tax payment and to those who remove the vehicles.
As I understand it, the purpose of the schedule is to catch motorists who avoid the detection and prosecution of vehicle excise duty evasion by keeping their unlicensed vehicles off the public road. Currently, the licensing law applies only to vehicles kept on public roads, so the rationale behind that change is sensible enough. It would be interesting to know what assessment the Treasury has made of the extent of the off-road detection-avoidance problem that it seeks to resolve.
While we recognise the need for local authorities and police forces to detect vehicle excise duty evasion, amendment No. 352 would ensure that clause 139 and schedule 45 do not run the risk of producing a clampers charter whereby over-zealous enforcement officers go beyond the spirit of the schedule and what is intended and impinge on private property in an entirely unacceptable way. Schedule 45 amends the definition of an offending vehicle from one on the public road simply to “a vehicle”. The schedule excludes nil licences, statutory off-road notification vehicles and car dealerships, which seems to cover most people who might be caught by the measure inadvertently. Nevertheless, how much access does the Economic Secretary think enforcement officials will have in detecting offenders’ vehicles?
The Treasury’s chosen language suggests that vehicles within the curtilage of a dwelling or dwellings—I understand that amendments are being tabled to amend the word “dwelling”—are not subject to immobilisation, removal or disposal. That is a sensible safeguard, to prevent enforcers, clampers and people who impound vehicles from simply strolling on to motorists’ driveways and impounding their vehicles. I am concerned, however, that the powers under the schedule are quite broad. There are legitimate off-limit areas that are not covered by the Treasury definition, but which are covered by amendment No. 352, thus narrowing the powers provided by the schedule. It would be helpful to hear the Treasury’s definition of “curtilage” from the Economic Secretary. According to the definition that I looked up, it is:
“The area of land occupied by a dwelling and its yard and outbuildings, actually enclosed or considered as enclosed.”
That seems to exclude private land away from a person’s home. At the moment, the schedule seems to protect people’s right not to have the authorities come on to their private property to impound a vehicle, but it does not give rights to people who may keep their vehicle quite legitimately further away from their property. I can certainly say, as somebody who lives in London, that there are many people in cities who, for all sorts of reasons to do with space, simply cannot house their vehicle where they live, or anywhere near where they live, and may rent private land or indeed a garage that is some way from their property. Perhaps they have a second car, and there is no space at their residence to keep a vehicle that is untaxed.
People living on large council estates may end up parking their vehicle some way from the block of flats that they live in. My reading of the rest of schedule 45 suggests that the Government want to protect people with such private property from having anyone come on to the land to impound their cars. My concern with this schedule is not that I am worried that enforcers will be able to impound cars of people who evade road tax—it is quite appropriate that we take action against people who do so—but that they will nevertheless have the right to go on to private property, and they may, or may not, have a well-founded reason for doing so. The car that they are aiming to detect and impound may not be there when they arrive but, nevertheless, the schedule gives people some serious powers to enter properties and areas when it is not appropriate to do so. The schedule does not provide enough discussion or setting-out of the increased responsibilities for authorities, which they need if they are to have a rationale and a reasonable argument for entering someone’s private property. Property may therefore be encroached on for erroneous reasons: the authorities may go to find a car that they have reason to believe, or indeed did not have reason to believe, had evaded road tax, but discover it is a different vehicle.
In setting out my argument, I want to press the Minister to tell the Committee a bit more about the additional powers given to people enforcing the laws, which I fully understand. I want road tax evasion to be tackled, but it is worrying that the powers are not matched up with the due process to be undertaken before they are exercised. Those are my concerns and I hope the Minister will be able to address them.
 
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