Clause 5.—(AMENDMENTS OF VEHICLES (EXCISE) ACT, 1962.) (Hansard, 15 May 1962)

§ Mr. Crosland
I want to put one question to the Parliamentary Secretary to the Ministry of Transport and make a suggestion to him which I made to the Financial Secretary about a year ago which would involve an amendment to the Clause and to the method of charging duty on some vehicles.
One of the things which is beginning to happen now, for reasons which we know, and which will increasingly happen if we have more liberalisation of import controls, is the rapid rise in the imports of very large American cars. These cars are about twice the size of British cars. There are many respects in which they cost us about twice as much as the average British car. They take up twice the parking space which most British cars take up. I imagine that 1285 they are unable to get into the space allocated at parking meters. The cost of parking space in the centre of London and Manchester is very high. Further, they tend to delay crowded urban traffic a great deal more than British cars of ordinary size.
It is quite illogical, and it should be illogical to a party which presumably believes in the use of taxes and prices rather than physical controls, that these very large cars, which impose on the rest of us about twice the cost which British cars impose on us, should pay duty at precisely the same rate and on the same basis as British cars. I should like to ask whether the Government, if they have not already considered, would be prepared to consider the idea, for which there is a strong logical case, of having imposed on top of the normal vehicle duty an additional one if a vehicle is above a certain length so that the duty would be charged according to the length of the vehicle.

§ The Parliamentary Secretary to the Ministry of Transport (Mr. John Hay)
The question which the hon. Member for Grimsby (Mr. Crosland) has put to me is one which does not, at first sight at any rate, appear to bear much resemblance to Clause 5, but he has chosen the opportunity presented by the Clause to put the point. All I can say is that this is not a new idea. Hon. Members interested in transport matters will have heard the noble Lord, Lord Stansgate—Mr. Wedgwood Benn, who used to be in this Chamber—frequently make a very similar point when we debated transport matters, particularly parking in London.
It has never been part of our consideration of parking and similar problems to conceive that it should be necessary to impose special taxes or rates of taxes upon different types of vehicles dependent purely upon their size. We charge duty on vehicles according to the purpose for which they are manufactured, but we have never considered the idea of imposing any duties or taxes according to the size of the vehicle. To redress the balance which the hon. Gentleman has already drawn to the attention of the Committee, many, if not most, of these large cars contribute substantially to the Revenue already in that they consume a larger quantity of light hydrocarbon oil—that is, petrol—and the 1286 Revenue benefits thereby. I will certainly bear in mind what the hon. Gentleman has said.

§ Mr. Mitchison
Before the Parliamentary Secretary finishes with this topic, may I ask him to answer the question which I was about to ask him? What is this Clause about?

§ Mr. Hay
I am delighted to have the opportunity of explaining it, although it will be necessary to detain the Committee for a few moments whilst trying to explain a somewhat complicated situation. I will do the best I can. The purpose of the Clause is to rectify two anomalies which we have discovered. Subsection (1) is intended to amend Section 7 (b) and 12 (9, b) of the Vehicles (Excise) Act, 1962, which, as the Committee will remember, is a consolidation Measure. These provisions deal with the offences of unlicensed use of a vehicle on a public road and they provide for penalties which have to be calculated by references to the words the duty chargeable in respect of the vehicle". Subsection (1) makes it clear that the amount of duty by reference to which the penalty is to be calculated is the annual rate applicable to the vehicle, being the rate in force at the date of the offence. The subsection also provides that, if there is a continuing offence, the offence shall be taken to have been committed on the latest date on which it continues. In that case the relevant rate for penalty purposes is to be taken as that which was in force on that day.
The background to this is that the penalty for using or keeping a vehicle unlicensed on a public road is £20, or three times the amount of duty chargeable in respect of the vehicle, whichever is the greater. Right down until 1st October, 1960, there was no great difficulty about this, because ever since 1952, when the Divisional Court decided the case of Holland v. Perry the position about the method of calculating these excise penalties was clear. From 1st October, 1960, a new system of period licensing was introduced. The effect of that was to remove the basis which underlay the reasoning of the Divisional Court in the case of Holland.
It has therefore, become necessary, since we are now licensing vehicles not 1287 by reference to a calendar year, but by reference to an annual period of so many months, to ensure that the use of the words the duty chargeable in respect of the vehicle Should refer to the new system and not to the old system under the previous legislation. For this reason, subsection (1) makes it clear that henceforth, when the court has to consider the amount of penalty to be charged if a vehicle is used or kept on a road unlicensed, it shall be calculated by reference to the new system of a four-monthly period and not to the old calendar year.
Subsection (2) deals with a somewhat different point.

§ Mr. Diamond
May I appeal to the hon. Gentleman not to leave out one word of the explanation he was proposing to give us about this second subsection, because we are intently interested in every single item in the Clause?

§ Mr. Hay
I am delighted to notice the assiduous interest of the hon. Member for Gloucester (Mr. Diamond) in this matter. I shall try not to leave anything out.
I was saying that subsection (2) deals with a rather different situation. Under Section 17 of the Vehicles (Excise) Act, 1962, it is an offence to make a false declaration when one applies for a vehicle licence. If one applies for a vehicle licence one must fill in a form and make a declaration that the particulars given on the form relating to the vehicle are accurate. That is all right when dealing with a single vehicle, but when motor traders apply for trade licences the trade licence relates, not to one vehicle, but to a number to which they may refer. Indeed, the trade plates may be moved from one vehicle to another. We have discovered that it is not at present an offence to make a false declaration when applying for a trade licence.
For that reason subsection (2) has been provided to put the position right. I hope that that will satisfy the hon. and learned Member for Kettering and the hon. Member for Gloucester.

§ Mr. Mitchison
The hon. Gentleman was kind enough to tell me behind the scenes more or less what the Clause was about and to mention the case which he has mentioned tonight. I wish to thank him for that and to congratulate him on what I thought a very clear explanation of things which obviously ought to be done and which we certainly have no intention of opposing.
I have one slightly critical comment to make. I have looked at the case in question. I think that if I had been concerned in the matter in the Ministry of Transport I should have made a change in the arrangements to strengthen them in that case, but I need not dilate on that now. It is always nice to end the first day on the Finance Bill in Committee on tolerably friendly terms. We have kept the hon. Gentleman here for a long time in order to hand him these bouquets.

§ Mr. H. Brooke
I beg to move, That the Chairman do report Progress and ask leave to sit again.
We have now completed five Clauses and seven Schedules of the Bill, which is good going. In numerical terms, it may be a record for the first day of the Committee stage of the Finance Bill, although the Committee will agree that we have not yet tackled the more difficult Clauses. In fact, the next Clause, Clause 6, is one of the major Clauses of the Bill. Having consulted my right hon. and learned Friend the Chancellor, I think that we shall all feel in better shape to tackle it if we put it off until tomorrow.

§ Mr. Callaghan
We are enchanted to hear that and to hear the encomiums which the Chief Secretary has poured on the Opposition. I think that we have to handle this Finance Bill in a sensible way, get through the business of lesser importance as quickly as we can and then take a reasonable time on the business which will divide us more appropriately. We shall certainly try to work on the Finance Bill this year in that way.
I am grateful to the Government for taking such an important Clause as that 1289 dealing with Purchase Tax tomorrow. I think that we shall have enough material on which to work tomorrow. Who can say how we shall end tomorrow? Certainly, I think that Purchase Tax will take up a full day, if not more.
In the spirit in which the Chief Secretary has moved this Motion, I wish to support it.