HC Deb 11 December 1978 vol 960 cc8-9
9. Mr. Grist

asked the Secretary of State for Wales whether his Department has estimated the economic effects in Wales of the proposed abolition of road tax.

Mr. John Morris

These cannot be measured with precision; but I do not believe that they will be substantial.

Mr. Grist

Does the Secretary of State realise that that is an extraordinary reply? Does he not understand that Wales, being distant from its main markets, will suffer because the costs of industry in Wales will rise in reaching those markets and that that will make Wales less attractive to new firms, which will have a damaging effect on employment in Wales?

Mr. Morris

I should have thought that that was a gross exaggeration. The hon. Gentleman may not be aware that diesel driven goods are not affected in any way. He should bear that in mind when he considers industrial factors.

Secondly, many private motorists will benefit from the abolition of road tax. Those who motor about 7,500 miles will benefit. Perhaps the hon. Gentleman will consider that everyone who pays tax now must shoulder the burden for those who do not pay tax—to the extent of £4 each.

Mr. Gwynfor Evans

Is the Secretary of State aware that people in rural areas, who often have to travel long distances to work, would stand to lose if the tax were abolished and the price of petrol was raised by even 10 per cent.? If it was raised by 20 per cent. the loss would be very heavy indeed and would make an impossible hole in the family budget.

Mr. Morris

Of course some people will suffer. Let us have that in the forefront of our minds. But not all people will suffer. A total of 7,500 miles allows a considerable distance for people to travel to work each day. It is only the mileage in excess of that figure for which people will be paying an additional amount that will upset the family budget. I should be the first to concede that people will be affected. However, the case should not be exaggerated, because there are also substantial benefits.

Mr. Nicholas Edwards

Does the Secretary of State agree that many of the areas that will suffer are precisely those that suffer the biggest handicaps at present in attracting industry and jobs? These areas will suffer because of the long distances involved. Will he look into the matter further?

Mr. Morris

One is always prepared to consider representations. However, I do not think that the hon. Gentleman should lend himself to the gross exaggeration of the case put by his hon. Friend the Member for Cardiff, North (Mr. Grist), because I should have thought that this increase, wherever it occurs, should be kept in balance and seen in its proper perspective, particularly because diesel vehicles will not be affected. As regards other vehicles, it depends on the amount of mileage travelled in one year.

Sir Anthony Meyer

Is it not a fact that those who stand to gain by this change live primarily in seats which the Labour Party might conceivably hope to retain, and that those who stand to lose live in seats which the Labour Party does not stand a hope of retaining?

Mr. Morris

I really must stop encouraging the hon. Gentleman from falling into the gutter so often.