§ 14. Mr. Farrasked the Chancellor of the Exchequer if he will seek to zero-rate electrically propelled vehicles from value added tax and exempt them from car tax.
§ Mr. LawsonI have no proposals for zero-rating such vehicles for VAT. I am happy to reassure my hon. Friend that they are not chargeable to car tax.
§ Mr. FarrI thank my hon. Friend for that answer. May I draw his attention to the joint communiqué issued last weekend as a result of the Prime Minister's meeting in Venice, which stressed the need to encourage development of alternative forms of energy? Will he put his personal efforts behind boosting Government expenditure in that direction, because the present total annual Government expenditure on such a vital research is at a negligible level?
§ Mr. LawsonMy energies, as a general rule, are not likely to be put towards boosting public expenditure in any area. My hon. Friend will be aware that the Finance Bill proposes the exemption of electrically-propelled vehicles from vehicle excise duty as an encouragement to the development of alternative energy sources for road transport.
§ Mr. Ian LloydWhile I welcome the news of that exemption, may I reinforce the plea of my hon. Friend the Member for Harborough (Mr. Farr) because, in the context of Venice, there seems to be little sign yet that Western economies generally are using powerfully and effectively the whole of the fiscal apparatus, as they will have to if they are to achieve a massive shift from a petroleum-based economy to other forms of energy?
§ Mr. LawsonI am not sure of the time scale during which alternative sources of energy are likely to come into play, but my hon. Friend will be aware of the increases in taxation that the Government have imposed upon oil and oil products with this consideration very much in mind.