HC Deb 22 July 1985 vol 83 cc707-8
3. Mr. Teddy Taylor

asked the Secretary of State for Transport what has been the effect of the campaign run by his Department to reduce motor vehicle licence evasion; and what is the latest estimate of the percentage of cars on the roads on which the appropriate licence duty has not been paid.

The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer)

Last year more than 290,000 vehicle excise duty evaders were prosecuted or settled out of court—10 per cent. more than in 1983. The number of offenders dealt with should be even higher this year as a result of further measures now being taken. The most recent survey of evasion estimated that about 3.5 per cent. of cars and light goods vehicles in use on the road are unlicensed.

Mr. Taylor

Despite my hon. Friend's energetic efforts, the amount of evasion still imposes a horrendous loss on the Treasury. Has he closed his mind to the possibility of raising the revenue through additional tax on petrol? Is he satisfied that local authorities have adequate powers to remove untaxed cars from the roads?

Mr. Spicer

We are certainly not complacent about the level of evasion, which, as my hon. Friend, who has taken a great deal of interest in the matter, said, results in about a £90 million loss of revenue. My hon. Friend made two suggestions. Changing to a different form of taxation is a matter for my right hon. Friend the Chancellor of the Exchequer. In changing the form of taxation many issues are at stake, one of which is clearly evasion. The Government have no plans to abolish VED now, and will do so only if the benefits from it are greater than the disadvantages. In regard to the suggestion to strengthen local authorities' powers to tow away unlicensed vehicles, such as they have in the case of abandoned vehicles, I point out that there are many practical difficulties. For example, in some cases the licence disc has merely fallen from the windscreen. However, we have not ruled out all possibilities of some form of controlled impounding.

Mr. Donald Stewart

Is the Minister aware that many of us recall the former Labour Member, Mr. Arthur Lewis challenging the Secretary of State's predecessors to go out with him on to the streets of London where he would demonstrate that more than one third of the licences were out of date? Without casting any aspersions on Londoners as against other United Kingdom citizens, does that not show evasion of that taxation on a massive scale? What does the Minister intend to do to correct that?

Mr. Spicer

The problem is not exclusive to London. We are glad that the Bill, which is strengthing the Government's powers in Scotland and allows for evasion to be prosecuted with only one witness, is now before the other place. It is a national problem and we are dealing with it nationally.

Mr. Eggar

Since evasion is a matter for my hon. Friend, should he not urge the Treasury to replace VED by extra tax on petrol?

Mr. Spicer

There are conflicting views about whether VED should be replaced by a different form of taxation. There are arguments for and against it, as my Department recognises.