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.
She also asked
about the rate of evasion. We think it is about 1.1 per cent among
vehicles sighted in traffic, according to estimates in the 2007
roadside survey. That equates to a revenue loss of about £79
million, so it is obviously an issue that is worth pursuing, and we
hope
that the measures before the Committee will help. I must apologise to
the hon. Lady, as she has not yet received answers to her written
questions: I will ensure that they are answered as speedily as
possible. Regarding her amendment, I suspect that there has been a
slight misunderstanding. It is not the intention nor, we think, the
legal effect of the clause to make electronic communication mandatory.
We are simply allowing it to be one of the forms of communication used.
We are not saying that people must communicate electronically, so I
hope that that reassures the hon. Lady. She also asked whether people
can apply for rebates over the phone. Submissions can currently be made
only on paper, but the clause allows for electronic
submissions. 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. The
hon. Member for Putney asked how it is proved that a vehicle is
permanently exported. The DVLA must be notified of the export in
writing, and it would
need to receive that before a rebate was considered. A statement of
proof is be needed. If the vehicle is re-imported, it is illegal for it
not to be licensed. We believe that that covers the points that she
raised. I believe that I have answered everything, so hopefully the
hon. Lady will withdraw her
amendment. 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.
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] Blackman-Woods,
Dr.
Roberta Question
accordingly agreed to.
Clause 138 ordered to stand
part of the
Bill. Clause 139
ordered to stand part of the
Bill.
Schedule
45Vehicle
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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