HC Deb 15 February 1979 vol 962 cc1304-5
16. Mr. Tebbit

asked the Chancellor of the Exchequer what representations he has received from the general aviation industry concerning the change from vehicle excise duty to petrol tax.

Mr. Robert Sheldon

I have reecived representations from general aviation interests and private flying associations that either the proposed increase in light oil taxation should not apply to aviation spirit or compensating relief should be given from other charges connected with light aviation.

Mr. Tebbit

As the Minister said that the object of the change was not to increase revenue, would he not agree that to impose an extra £2 million of taxation on this small industry is unfair? Is he aware that aviation fuel is currently 25 per cent. more expensive than motor fuel? Therefore, even with an increase of 20p or 30p per gallon in tax there would be no incentive on motorists to use aviation fuel and therefore no risk of loss of revenue.

Mr. Sheldon

Yes. The difficulty is that the Customs and Excise tax the fuel and not the purpose for which the fuel is intended. As a result, there are obvious control difficulties. This is a complication that the hon. Gentleman is trying to introduce into the operation of the tax. No final decisions have been taken on these matters. There is scope yet for Consultation. The phasing period is lengthy, during which time these consultations may proceed.

Mr. Wells

Is the Minister aware that a marked proportion of horticultural production still uses petrol-driven tractors? An increase in petrol duty will mean a direct increase in the price of horticulural produce, which is approximately one-third of the value of everybody's food?

Mr. Sheldon

Yes. I am aware of the problems to which the hon. Gentleman refers. He will be aware that there will be a number of discussions to deal with these precise points. A number of discussion documents are yet to be issued. These points may be examined in due course.

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