HC Deb 23 July 1919 vol 118 cc1464-7

In the case of excise licences for motor cars granted after the passing of this Act in the year nineteen hundred and nineteen, or in any subsequent year, the duty upon payment of which the licence may be granted shall be reduced by one-quarter of the full amount of the duty if the period for which the licence will be in force begins on or after the first day of April but before the first day of July, by one-half if the period begins on or after the first day of July but before the first day of October, and by three-quarters if the period begins on or after the first day of October.—[Colonel Gretton.]

Brought up, and read the first time.


I beg to move. That the Clause be read a second time. It relates to the payment of the Licence Duty taken out on motor cars. This is an old grievance, which has been mentioned more than once before in this House. Various objections to amending the law have been urged, but the fact is that the duties come high on many classes of motor cars for a whole year in cases where the licence is taken out at the latter end of the year. This is to some extent acknowledged, because the Treasury, after the 1st of October, charge only half a year's tax for the last quarter of the year, so that a man who has to take out a licence on the 15th of September would pay a whole year's tax, whereas if he takes it out on the 2nd of October he pays half a year's tax. In both cases he will get only a portion of the year, but in the one case he will get only a few days more than a quarter of the year in which to use his car, for which he has to pay this very high licence. The form in which the Clause is drafted is to meet the objection which has been raised that such an alteration as is proposed would not be administratively possible. But it is quite possible to give directions that after a given date—say the 1st of April in any year—three-quarters only of licence tax should be charged; after the 1st of July one-half only; and after the 1st of October one quarter. That is not a very serious matter. It may be made an objection that motor cars are pleasure vehicles. Motor cars, especially the cheaper class of car, are used now very largely for business purposes. They are used, as everyone knows, by doctors, veterinary surgeons, farmers, travellers, and by many business men. In order to get about from one place to another, where their businesses are being conducted, they have to employ motor cars. The motor car is no longer a pleasure or a luxury; it enters seriously into the business life of the country, and it is from that point of view that I venture to put this Clause before the House. I would not care to argue such a Clause on the case of a luxury car such as would now realise £2,000 or upwards. If anyone can afford to purchase such a car, he would have no cause to quarrel at having to pay a whole year's duty for a portion of the first year of its existence. It is on the general principle, which everyone will share, that I urge this new Clause in order that a very real grievance and sense of injustice may be removed. I cannot think that the cost of this will be any serious matter to the Exchequer; in fact, it may well be that more licences will be taken out at the end of the year, and that the Chancellor of the Exchequer will, as a matter of fact, get a good many quarterly and half-yearly licences paid for which otherwise he would have to wait until a later year to collect. An arrangement of this kind would work both ways, and, on balance, I am confident that he is not really standing to lose any serious amount of revenue by the acceptance of this Clause, while he will give a very great deal of satisfaction to a large number of persons and remove what is undoubtedly a grievance.


This Clause follows a proposal which my hon. and gallant Friend made in Committee, and it is a successful endeavour on his part, to meet one of the objections which I pointed out to the particular Clause which he then suggested. His original suggestion was that the licence should be varied, not only quarter by quarter but day by day. It has been recognised in the scheme which obtains at present that there is a difference between a car which is only used during the last six months of the year and a car for which the licence is taken out during the first half of the year. My hon. and gallant Friend now asks that the charge may be differentiated every quarter, and he assures me that, in his opinion, I should gain as much as I should lose, because more people would take out licences in the concluding quarter of the year who now postpone the taking out of their licences until the new year. It is very difficult to speak with confidence on matters as speculative as that. I am always astounded myself at the accuracy with which the Inland Revenue or other revenue authorities are able to forecast the results of changes in the law one way or the other, the effect of which I should have thought it would have been impossible to predict. I do not lay too much stress upon their opinions in this particular matter, but they advise me that I should probably be a loser, and that one effect among others would be that the owners of luxury cars—just that class of owners whom my hon. and gallant Friend does not wish to protect—would lay up their luxury cars in the bad months of the year and only take out their licences in the good ones. I see no reason, whatever may bethought about the case of the smaller man which my hon. and gallant Friend has particularly at heart, to relieve the owners of such luxury cars of the charges which Parliament has decided should be placed upon their use, and I am afraid it would be quite impossible to differentiate between the two classes. I do not think there is any widespread sense of grievance. Nobody has made any representations to me on the subject, except my hon. and gallant Friend himself. I do not know whether it is he himself or some of his Friends who feel particularly distressed by the fact that they could not take out a licence for a car for a quarter without having to pay for six months; but I think such people are very few, and I hope he will not press the Clause.


After what the right hon. Gentleman has said, I cannot very well press this matter further, especially as I do not want to take up the time of the House. But I hope it will not be lost sight of. I think my proposal is essentially a just one, and that any administrative difficulties could be easily overcome.

Motion and Clause, by leave, withdrawn.

The following new Clause stood on the Paper in the name of Major COURTHOPE: Sub-section (12) of Section eight of the Finance Act, 1894 (which provides for the recovery of the excess when Estate Duty has been overpaid), shall, in its application to over payments made after the commencement of this Act, have effect as though four percent. were substituted for three percent. as the rate of interest per annum.


This Clause imposes a charge. Where Estate Duty is repaid after having been improperly collected the Finance Act of 1894 provides for the payment of interest at the rate of 3 percent. The hon. and gallant Member proposes to raise that to 4 percent., and that would impose a charge on the taxpayer, who will have to find the money.