HC Deb 11 July 1984 vol 63 cc1262-6
Mr. Wallace

I beg to move amendment No. 95, in page 125, line 38, after 'Northern Ireland', insert 'or which (whenever registered) is of less than 1300 cc'. The effect of the amendment would be to establish a vehicle excise duty of £60 per annum for all private vehicles with a cylinder capacity of 1300 cc or less. This reduced rate already exists for that special class of vehicle, those registered before 1 January 1947. The amendment would extend the relief—two thirds of the rate which would otherwise apply — to a modest basic size of family car.

We do not make any great claims for this modest proposal. Many would suggest that we go further and challenge the very existence of the vehicle excise duty. Many of my constituents who live on the smaller islands have access to only a few miles of wee roads and they take great exception to paying the same rate of excise duty as those living near the centre of Birmingham with access to many hundreds of miles of motorways.

There are many who feel that it would be wise to abolish the duty and make up the revenue from petrol duty so that the road user, especially with a vehicle of inefficient fuel consumption, would have to pay. Unfortunately, we are lumbered with the duty for the time being and we seek to introduce some refinement of it.

First, we would wish to refine the system in the name of fairness. Having endured a number of years when the balance of the Budgets presented by the Government has almost certainly been tilted in favour of the rich, there is a strong case for somewhat redressing the balance and taxing the basic family car at a lower rate than a larger luxury car. In many instances, larger cars are part of company fleets and the tax is paid by the employer company. We do not say that the amendment is a great progressive tax measure, but it is a step in the right direction.

Secondly, the proposed relief is in the cause of oil conservation. It is estimated that 79 per cent. of the energy consumed by the transport sector in 1982 in the United Kingdom was consumed by road transport and that about 60 per cent. of total transport use could be attributed to the private car or the motor cycle.

Although it is impossible to plot a straight-line, direct relationship between cylinder capacity and petrol consumption — energy efficiency is also a significant factor—I think that it will be generally accepted that there is a relationship between cylinder capacity and amount of petrol that is consumed by a particular vehicle.

The shock of the 1973 oil crisis made everyone conscious of the need to conserve energy. Speed restrictions were introduced to promote that cause. Latterly —no doubt the trend has been due in part to North sea oil riches — there has been greater complacency. In 1970, 50 per cent. of private cars and vans were under 1300 cc, but by 1982 the proportion had fallen to 26 per cent. There has clearly been a trend towards the use of cars with much larger engines. We do not claim that the amendment would overnight change purchasing habits, but it would be a step in the right direction.

We are regularly told that the Government, or at least the Department of Energy, are promoting an energy efficiency campaign. The amendment is a practical measure that would back up such a campaign. It is in contrast to the lunatic proposals which were published recently, which would increase the mileage allowances of hon. Members in line with engine capacity. That is the sort of measure that brings the House into disrepute with the public and runs counter to the example that we should be showing to the public by giving a lead in energy conservation.

Many might quibble about the limit of 1300 cc. We have related that cylinder capacity to the size of a basic family car, which covers such a popular car as the Mini Metro. We believe that it is a reasonable cut-off point. I commend the motion to the House, in the interests of fairness and energy conservation

Mr. Hayhoe

The hon. Member for Orkney and Shetland (Mr. Wallace) has explained that the purpose of the amendment is to extend the £60 reduced rate of vehicle excise licence to all cars of less than 1300 cc rather than to all cars registered before 1 January 1947. The hon. Gentleman described the consequent relief as modest. I must tell him that making all cars not exceeding 1300 cc eligible for the £60 rate would bear on 8.5 million cars, representing a revenue loss of over £250 million. If the hon. Gentleman sees that as a modest relief in the context of the Budget, one wonders in what world of fantasy he and his colleagues live. That is an extraordinary sense of priorities

Mr. Alex Carlile

Does that take into account the energy savings that would be made if the public were encouraged by proposals of this sort to use cars with smaller engines which therefore use less fuel?

8.30 am
Mr. Hayhoe

I said that the revenue cost—we are dealing with the legislative effect of the Budget—of the amendment is more than £250 million. In the context of the debate in Committee and on Report, it is extraordinary to propose to absorb so many resources into such a measure.

The hon. Member for Orkney and Shetland raised an interesting question about the comparison between changes in VED and fuel tax. That is a different and wider question, which does not arise on this amendment. As the hon. Gentleman rightly said, this matter absorbs the attention of many hon. Members. The bare proposition before the House is not acceptable. I hope that, if pressed the House will reject it

Mr. Wallace

I believe that my hon. Friends will be disappointed at the Minister's reply. My hon. and learned Friend the Member for Montgomery (Mr. Carlile) made it clear in his intervention that no account had been taken of the energy savings that would be achieved by the amendment. It is becoming clear to the nation and to many hon. Members that, although the Department of Energy is trying to do a good job supporting energy efficiency, it is receiving no help from any other Government Department. That should be made clear.

The figure cited by the Minister suggests that our measure might be more progressive than that we had believed. Having regard to the Minister's reply, I certainly have no intention of withdrawing the amendment, and shall press it to a Division.

Question put, That the amendment be made:—

The House divided: Ayes 11, Noes 195.

Divlsion No. 406] [8.32 am
AYES
Ashdown, Paddy Wallace, James
Beith, A. J. Wigley, Dafydd
Campbell-Savours, Dale Wrigglesworth, Ian
Carlile, Alexander (Montg'y)
Hancock, Mr. Michael Tellers for the Ayes:
Owen, Rt Hon Dr David Mr. Michael Meadowcroft and Mr. Archy Kirkwood.
Ross, Stephen (Isle of Wight)
Skinner, Dennis
NOES
Alexander, Richard Favell, Anthony
Alison, Rt Hon Michael Fenner, Mrs Peggy
Amess, David Forsyth, Michael (Stirling)
Ashby, David Forth, Eric
Atkinson, David (B'm'th E) Freeman, Roger
Baker, Rt Hon K. (Mole Vall'y) Gale, Roger
Baker, Nicholas (N Dorset) Galley, Roy
Banks, Robert (Harrogate) Gardiner, George (Reigate)
Batiste, Spencer Garel-Jones, Tristan
Bellingham, Henry Goodlad, Alastair
Benyon, William Gorst, John
Best, Keith Gow, Ian
Bevan, David Gilroy Gower, Sir Raymond
Biffen, Rt Hon John Greenway, Harry
Biggs-Davison, Sir John Griffiths, Peter (Portsm'th N)
Bonsor, Sir Nicholas Grist, Ian
Boscawen, Hon Robert Ground, Patrick
Bottomley, Peter Hamilton, Neil (Tatton)
Bottomley, Mrs Virginia Hannam, John
Bowden, Gerald (Dulwich) Hargreaves, Kenneth
Brandon-Bravo, Martin Havers, Rt Hon Sir Michael
Bright, Graham Hawkins, C. (High Peak)
Brinton, Tim Hawksley, Warren
Browne, John Hayes, J.
Bruinvels, Peter Hayhoe, Barney
Burt, Alistair Hayward, Robert
Butterfill, John Heathcoat-Amory, David
Carlisle, Kenneth (Lincoln) Heddle, John
Cash, William Henderson, Barry
Chalker, Mrs Lynda Hickmet, Richard
Churchill, W. S. Hogg, Hon Douglas (Gr'th'm)
Clark, Hon A. (Plymth S'n) Holt, Richard
Clark, Dr Michael (Rochford) Hooson, Tom
Colvin, Michael Howarth, Alan (Stratf'd-on-A)
Cope, John Howarth, Gerald (Cannock)
Cormack, Patrick Howell, Ralph (N Norfolk)
Corrie, John Hubbard-Miles, Peter
Couchman, James Hunt, David (Wirral)
Cranborne, Viscount Irving, Charles
Currie, Mrs Edwina Jackson, Robert
Dicks, Terry Jessel, Toby
Dorrell, Stephen Johnson-Smith, Sir Geoffrey
Douglas-Hamilton, Lord J. Jones, Robert (W Herts)
Dover, Den Kellett-Bowman, Mrs Elaine
Eggar, Tim Key, Robert
Emery, Sir Peter Emery, Sir Peter
Knight, Gregory (Derby N) Page, Richard (Herts SW)
Knight, Mrs Jill (Edgbaston) Parris, Matthew
Knowles, Michael Peacock, Mrs Elizabeth
Lang, Ian Porter, Barry
Latham, Michael Powell, William (Corby)
Lawson, Rt Hon Nigel Powley, John
Leigh, Edward (Gainsbor'gh) Proctor, K. Harvey
Lennox-Boyd, Hon Mark Raffan, Keith
Lightbown, David Rathbone, Tim
Lilley, Peter Rees, Rt Hon Peter (Dover)
Lloyd, Ian (Havant) Rhodes James, Robert
Lloyd, Peter, (Fareham) Ridley, Rt Hon Nicholas
Lord, Michael Rifkind, Malcolm
McCurley, Mrs Anna Robinson, Mark (N'port W)
Macfarlane, Neil Roe, Mrs Marion
MacKay, Andrew (Berkshire) Rowe, Andrew
Maclean, David John Rumbold, Mrs Angela
McQuarrie, Albert Ryder, Richard
Malone, Gerald Sainsbury, Hon Timothy
Maples, John Sayeed, Jonathan
Mawhinney, Dr Brian Shepherd, Colin (Hereford)
Maxwell-Hyslop, Robin Silvester, Fred
Meyer, Sir Anthony Sims, Roger
Mills, Iain (Meriden) Soames, Hon Nicholas
Mitchell, David (NW Hants) Speller, Tony
Moate, Roger Spencer, Derek
Monro, Sir Hector Spicer, Jim (W Dorset)
Moore, John Squire, Robin
Morris, M. (N'hampton, S) Stanbrook, Ivor
Moynihan, Hon C. Steen, Anthony
Neale, Gerrard Stern, Michael
Needham, Richard Stevens, Lewis (Nuneaton)
Nelson, Anthony Stewart, Allan (Eastwood)
Nicholls, Patrick Stewart, Andrew (Sherwood)
Norris, Steven Stewart, Ian (N Hertfdshire)
Oppenheim, Philip Stokes, John
Stradling Thomas, J. Ward, John
Taylor, John (Solihull) Wardle, C. (Bexhill)
Taylor, Teddy (S'end E) Watson, John
Temple-Morris, Peter Watts, John
Terlezki, Stefan Wells, Bowen (Hertford)
Thatcher, Rt Hon Mrs M. Wheeler, John
Thompson, Patrick (N'ich N) Whitfield, John
Thurnham, Peter Winterton, Mrs Ann
Townsend, Cyril D. (B'heath) Winterton, Nicholas
Tracey, Richard Wolfson, Mark
Trippier, David Wood, Timothy
Twinn, Dr Ian Woodcock, Michael
Viggers, Peter Young, Sir George (Acton)
Wakeham, Rt Hon John
Walden, George Tellers for the Noes:
Walker, Bill (T'side N) Mr. Michael Neubert and Mr. John Major.
Wall, Sir Patrick
Waller, Gary

Question accordingly negatived.

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