HC Deb 30 January 1995 vol 253 cc755-825
Ms Primarolo

I beg to move amendment No. 27, in page 164, leave out line 23.

The First Deputy Chairman of Ways and Means (Mr. Geoffrey Lofthouse)

With this, it will be convenient to discuss also the following amendments: No. 22, leave out line 26.

  • No. 23, leave out line 27.
  • No. 24, leave out line 28.
  • No. 25, leave out lines 29 and 30.

Ms Primarolo

The amendments cover similar ground to the previous debate. I do not intend to delay the Committee by referring to each amendment, but I shall make special reference to amendment No. 27, which would maintain the status quo for electrically propelled vehicles. All the amendments would maintain the status quo of vehicle excise duty, as plan B in persuading the Government to undertake the review for which we argued in the past debate but, so far, have failed to secure.

There are no precise figures on the number of electric milk floats in use, but it is estimated that there are 25,000 milk rounds in England and Wales alone and on at least two thirds of those, electric vehicles are used. The imposition of even a reduced rate of £35 vehicle excise duty represents a considerable annual increase in costs to the industry. Any increase in cost targeted directly at doorstep delivery is a further threat to the viability of the milk round. The Government have maintained their support for the delivery of milk to people's doorsteps and we are sure that, on reflection, they will wish to reconsider the imposition.

A statement that the use of electric vehicles should not be penalised would be a positive contribution to the Government's professed claim to reduce carbon dioxide emissions. Because of their very nature, the use of electric vehicles should be encouraged, not penalised by the imposition of vehicle excise duty. Since taxation is used by the Government as a method of encouraging environmentally friendly use of vehicles, it is absolutely absurd that they now propose to extend to all vehicles of this class an initial vehicle excise duty which, no doubt in subsequent years, they will seek to increase.

Ministerial responses to representations made so far have been inconsistent, to put it politely. The Secretary of State for Transport has stated that the imposition of a £35 rate of duty on electric milk floats will reduce evasion and be easier to understand and administer. What gobbledegook; what rubbish. How can there be any evasion if there is no tax in the first place? Perhaps the Government will explain why we need to propose a tax to prevent evasion in a category in which there can be no evasion because there is no tax.

The Minister of Agriculture, Fisheries and Food has said that it is a matter for the Treasury and that the imposition will make fraud more difficult and increase efficiency of administration. What utter rubbish. The whole purpose of introducing this taxation is to open up a new area of indirect taxes—a rich vein into which the Government hope to tap, in their efforts to establish for themselves a war chest of booty from the electorate that the Government can try to give back in electoral bribes by reducing direct taxes just before the general election.

The Minister added insult to injury by calculating the additional tax on a cost per pint of milk in an attempt to hide the reality that the industry will face enormous difficulties. The imposition of costs which in the first year may be as much as £500,000 will undermine the milk rounds' ability to continue to exist.

We stand by the speeches made by Opposition Members in previous debates. We urge the Minister to withdraw the imposition of vehicle excise duty on (he vehicle classes listed in schedule 4 and to consider bringing before the Committee a more rational, sensible and logically argued case for a new regime of vehicle excise duty.

Mr. Heathcoat-Amory

We recognise that electric vehicles have certain environmental advantages. That is why they will be taxed at such an advantages. That is why they will be taxed at such an advantageous rate. Some would say that the enviornmental advantages are not overwhelming because an electrically powered vehicle has to use power generated elsewhere; in a sense, one is therefore simply shifting the pollution from the vehicle to the generating plant.

I recognise that such vehicles have certain advantages, especially because they produce less noise, which is why they will be placed in a concessionary class and charged £35 per annum only. However, it is right that they should be removed from the totally exempt category, which we are reserving for emergency vehicles and those used by the severely disabled.

Electric vehicles have an additional advantage in that there is no excise duty payable on the fuel that they use—electrical power.

Ms Primarolo

VAT is paid on it.

Mr. Heathcoat-Amory

The hon. Lady suggests from a sedentary position that VAT is payable on the electricity. That is, of course, not the case. If she were to think more carefully, she would realise that the electricity is supplied commercially and, therefore, the VAT payable on the electricity supply is recoverable as input tax.

The other amendments in the group cover snow-clearing, ice-gritting, street-cleansing vehicles, and so on. We covered the point in relation to those vehicles fairly comprehensively. However, the hon. Lady must face up to something that she persistently avoids: she wants street-cleansing vehicles to be exempt from excise duty even though it has been explained to her that when the same type of vehicle is used for marginally different activities—for example, cleaning out an underground drain or sewer—it will bear, according to the Opposition amendments, or lack of them, a full rate of vehicle excise duty.

How can Labour Members tolerate the continuance of a glaring anomaly when their whole Budget strategy was apparently based—or so we were told at the time—on ending anomalies and loopholes? Until they clear up that confusion in their own thinking, I do not think that the Committee will take the amendment seriously.

Question put, That the amendment be made:—

The Committee divided: Ayes 222, Noes 276.

Division No. 55] [8.30 pm
Abbott, Ms Diane Dalyell, Tam
Adams, Mrs Irene Darling, Alistair
Ainger, Nick Davidson, Ian
Ainsworth, Robert (Cov'try NE) Davies, Bryan (Oldham C'tral)
Allen, Graham Davies, Rt Hon Denzil (Llanelli)
Anderson, Donald (Swansea E) Denham, John
Armstrong, Hilary Dixon,Don
Ashdown, Rt Hon Paddy Donohoe, Brian H
Ashton, Joe Dunwoody, Mrs Gwyneth
Austin-Walker, John Eagle, Ms Angela
Banks, Tony (Newham NW) Eastham, Ken
Barnes, Harry Enright, Derek
Battle, John Etherington, Bill
Bayley, Hugh Evans, John (St Helens N)
Beckett, Rt Hon Margaret Ewing, Mrs Margaret
Beith, Rt Hon A J Field, Frank (Birkenhead)
Bell, Stuart Fisher, Mark
Benn, Rt Hon Tony Foster, Rt Hon Derek
Benton, Joe Foster, Don (Bath)
Bermingham, Gerald Foulkes, George
Berry, Roger Fyfe, Maria
Blunkett, David Galbraith, Sam
Boateng, Paul Galloway, George
Boyes, Roland Gapes, Mike
Bradley, Keith George, Bruce
Bray, Dr Jeremy Gerrard, Neil
Brown, Gordon (Dunfermline E) Gilbert, Rt Hon Dr John
Brown, N (N'c'tle upon Tyne E) Godman, Dr Norman A
Bruce, Malcolm Golding, Mrs Llin
Burden, Richard Graham, Thomas
Caborn, Richard Griffiths, Nigel (Edinburgh S)
Callaghan, Jim Grocott, Bruce
Campbell-Savours, D N Harman, Ms Harriet
Canavan, Dennis Harvey, Nick
Cann, Jamie Heppell, John
Chidgey, David Hill, Keith (Streatham)
Chisholm, Malcolm Hinchliffe, David
Church, Judith Hoon, Geoffrey
Clapham, Michael Hoyle, Doug
Clark, Dr David (South Shields) Hughes, Kevin (Doncaster N)
Clarke, Eric (Midlothian) Hughes, Robert (Aberdeen N)
Clarke, Tom (Monklands W) Hutton,John
Clelland, David Illsley, Eric
Clwyd,Mrs Ann Ingram, Adam
Coffey, Ann Jackson, Helen (Shef'ld, H)
Cohen, Harry Jamieson, David
Connarty, Michael Janner, Greville
Cook, Robin (Livingston) Jones, Barry (Alyn and D'side)
Corbett, Robin Jones, Lynne (B'ham S O)
Corbyn, Jeremy Jones, Martyn (Clwyd, SW)
Cousins, Jim Jones, Nigel (Cheltenham)
Cunningham, Jim (Covy SE) Kaufman, Rt Hon Gerald
Cunningham, Rt Hon Dr John Keen, Alan
Kennedy, Charles (Ross,C&S) Pope, Greg
Kennedy, Jane (Lpool Brdgn) Powell, Ray (Ogmore)
Khabra, Piara S Prentice, Gordon (Pendle)
Kilfoyle, Peter Prescott, Rt Hon John
Kirkwood, Archy Primarolo, Dawn
Lestor, Joan (Eccles) Purchase, Ken
Lewis, Terry Quin, Ms Joyce
Liddell, Mrs Helen Radice, Giles
Livingstone, Ken Randall, Stuart
Lloyd, Tony (Stretford) Reid, Dr John
Llwyd, Elfyn Rendel, David
Loyden, Eddie Robertson, George (Hamilton)
Lynne, Ms Liz Robinson, Geoffrey (Co'try NW)
McAllion, John Rogers, Allan
McAvoy, Thomas Rooney, Terry
McCartney, Ian Ross, Ernie (Dundee W)
McCrea, The Reverend William Ross, William (E Londonderry)
Macdonald, Calum Ruddock, Joan
McKelvey, William Sedgemore, Brian
Mackinlay, Andrew Sheldon, Rt Hon Robert
Maclennan, Robert Shore, Rt Hon Peter
MacShane, Denis Short, Clare
Madden, Max Skinner, Dennis
Maddock, Diana Smith, Andrew (Oxford E)
Mahon, Alice Smith, Chris (Isl'ton S & F'sbury)
Marek, Dr John Smith, Llew (Blaenau Gwent)
Marshall, David (Shettleston) Snape, Peter
Martin, Michael J (Springburn) Soley, Clive
Martlew, Eric Spearing, Nigel
Maxton, John Spellar, John
Meacher, Michael Squire, Rachel (Dunfermline W)
Meale, Alan Steel, Rt Hon Sir David
Michie, Bill (Sheffield Heeley) Steinberg, Gerry
Michie, Mrs Ray (Argyll & Bute) Stevenson, George
Milburn, Alan Stott, Roger
Miller, Andrew Strang, Dr. Gavin
Molyneaux, Rt Hon James Sutcliffe, Gerry
Moonie, Dr Lewis Taylor, Matthew (Truro)
Morgan, Rhodri Tipping, Paddy
Morley Elliot Turner, Dennis
Morris, Rt Hon Alfred (Wy'nshawe) Vaz, Keith
Morris, Estelle (B'ham Yardley) Walker, Rt Hon Sir Harold
Morris, Rt Hon John (Aberavon) Wallace, James
Mudie, George Wardell, Gareth (Gower)
Mullin, Chris Wareing, Robert N
Oakes, Rt Hon Gordon Watson, Mike
O'Brien, William (Normanton) Wicks, Malcolm
O'Hara, Edward Wigley, Dafydd
Olner, Bill Williams, Rt Hon Alan (Sw'n W)
O'Neill, Martin Williams, Alan W (Carmarthen)
Paisley, The Reverend Ian Wise, Audrey
Parry, Robert Worthington, Tony
Patchett, Terry Wright, Dr Tony
Pearson, Ian
Pendry, Tom Tellers for the Ayes:
Pickthall, Colin Mr. Peter Mandelson and
Pike, Peter L Mr. Jon Owen Jones
Ainsworth, Peter (East Surrey) Bellingham, Henry
Aitken, Rt Hon Jonathan Bendall, Vivian
Alison, Rt Hon Michael (Selby) Beresford, Sir Paul
Amess, David Biffen, Rt Hon John
Ancram, Michael Booth, Hartley
Arbuthnot, James Boswell, Tim
Arnold, Jacques (Gravesham) Bottomley, Peter (Eltham)
Arnold, Sir Thomas (Hazel Grv) Bottomley, Rt Hon Virginia
Ashby, David Bowden, Sir Andrew
Atkins, Robert Bowis, John
Atkinson, Peter (Hexham) Boyson, Rt Hon Sir Rhodes
Baker, Nicholas (North Dorset) Brandreth, Gyles
Baldry, Tony Brazier, Julian
Banks, Matthew (Southport) Bright, Sir Graham
Banks, Robert (Harrogate) Brooke, Rt Hon Peter
Bates, Michael Brown, M (Brigg & Cl'thorpes)
Batiste, Spencer Browning, Mrs Angela
Bruce, Ian (Dorset) Hargreaves, Andrew
Budgen, Nicholas Harris, David
Burns, Simon Haselhurst, Alan
Butcher, John Hawkins, Nick
Butler, Peter Hawksley, Warren
Butterfill, John Hayes, Jerry
Carlisle, John (Luton North) Heald, Oliver
Carlisle, Sir Kenneth (Lincoln) Heath, Rt Hon Sir Edward
Carrington, Matthew Heathcoat-Amory, David
Carttiss, Michael Hendry, Charles
Cash, William Higgins, Rt Hon Sir Terence
Channon,Rt Hon Paul Hill, James (Southampton Test)
Chapman, Sydney Hogg, Rt Hon Douglas (G'tham)
Clappison, James Horam, John
Clark, Dr Michael (Rochford) Hordern, Rt Hon Sir Peter
Clarke, Rt Hon Kenneth (Ru'clif) Howard, Rt Hon Michael
Clifton-Brown, Geoffrey Howarth, Alan (Strat'rd-on-A)
Congdon, David Howell, Rt Hon David (G'dford)
Conway, Derek Hughes, Robert G (Harrow W)
Coombs, Anthony (Wyre For'st) Hunt, Rt Hon David (Wirral W)
Coombs, Simon (Swindon) Hunter, Andrew
Cope, Rt Hon Sir John Hurd, Rt Hon Douglas
Cormack, Sir Patrick Jack, Michael
Couchman, James Jackson, Robert (Wantage)
Cran, James Jenkin, Bernard
Currie, Mrs Edwina (S D'by'ire) Jessel,Toby
Curry, David (Skipton & Ripon) Jones, Gwilym (Cardiff N)
Davies, Quentin (Stamford) Jones, Robert B (W Hertfdshr)
Day, Stephen Kellett-Bowman, Dame Elaine
Deva, Nirj Joseph Key, Robert
Devlin, Tim King, Rt Hon Tom
Dicks, Terry Kirkhope, Timothy
Dorrell, Rt Hon Stephen Knapman, Roger
Douglas-Hamilton, Lord James Knight, Mrs Angela (Erewash)
Dover, Den Knight, Greg (Derby N)
Duncan, Alan Knox, Sir David
Duncan Smith, Iain Kynoch, George (Kincardine)
Dunn, Bob Lait, Mrs Jacqui
Dykes, Hugh Lang, Rt Hon Ian
Elletson, Harold Lawrence, Sir Ivan
Emery, Rt Hon Sir Peter Legg, Barry
Evans, David (Welwyn Hatfield) Leigh, Edward
Evans, Jonathan (Brecon) Lennox-Boyd, Sir Mark
Evans, Nigel (Ribble Valley) Lester, Jim (Broxtowe)
Evans, Roger (Monmouth) Lidington, David
Evennett, David Lightbown, David
Faber, David Lilley, Rt Hon Peter
Fabricant, Michael Lloyd, Rt Hon Sir Peter (Fareham)
Field, Barry (Isle of Wight) Lord, Michael
Fishburn, Dudley Luff, Peter
Forman, Nigel Lyell, Rt Hon Sir Nicholas
Forsyth, Rt Hon Michael (Stirling) MacGregor, Rt Hon John
Forth, Eric MacKay, Andrew
Fowler, Rt Hon Sir Norman Maclean, David
Fox, Dr Liam (Woodspring) McLoughlin, Patrick
Fox, Sir Marcus (Shipley) McNair-Wilson, Sir Patrick
Freeman, Rt Hon Roger Madel, Sir David
French, Douglas Maitland, Lady Olga
Gale, Roger Malone, Gerald
Gallie, Phil Mans, Keith
Gardiner, Sir George Marland, Paul
Garnier, Edward Marlow, Tony
Gill, Christopher Marshall, John (Hendon S)
Gillan, Cheryl Marshall, Sir Michael (Arundel)
Goodson-Wickes, Dr Charles Martin, David (Portsmouth S)
Gorman, Mrs Teresa Mates, Michael
Gorst, Sir John Mellor, Rt Hon David
Grant, Sir A (SW Cambs) Merchant, Piers
Greenway, Harry (Ealing N) Mills, Iain
Greenway, John (Ryedale) Mitchell, Andrew (Gedling)
Griffiths, Peter (Portsmouth, N) Mitchell, Sir David (NW Hants)
Grylls, Sir Michael Moate, Sir Roger
Hague, William Monro, Sir Hector
Hampson, Dr Keith Montgomery, Sir Fergus
Hanley, Rt Hon Jeremy Moss, Malcolm
Hannam, Sir John Needham, Rt Hon Richard
Nelson, Anthony Spring, Richard
Neubert, Sir Michael Sproat, Iain
Newton, Rt Hon Tony Squire, Robin (Hornchurch)
Nicholls, Patrick Stanley, Rt Hon Sir John
Nicholson, David (Taunton) Stephen, Michael
Nicholson, Emma (Devon West) Stern, Michael
Norris, Steve Stewart, Allan
Onslow, Rt Hon Sir Cranley Streeter, Gary
Oppenheim, Phillip Sumberg, David
Page, Richard Sykes, John
Paice, James Tapsell, Sir Peter
Patten, Rt Hon John Taylor, Ian (Esher)
Pattie, Rt Hon Sir Geoffrey Taylor, John M (Solihull)
Peacock, Mrs Elizabeth Taylor, Sir Teddy (Southend, E)
Pickles, Eric Temple-Morris, Peter
Porter, Barry (Wirral S) Thomason, Roy
Porter, David (Waveney) Thompson, Patrick (Norwich N)
Portillo, Rt Hon Michael Thornton, Sir Malcolm
Powell, William (Corby) Thurnham, Peter
Redwood, Rt Hon John Townsend, Cyril D (Bexl'yh'th)
Richards, Rod Tracey, Richard
Riddick, Graham Tredinnick, David
Robathan, Andrew Trend, Michael
Roberts, Rt Hon Sir Wyn Twinn, Dr Ian
Robertson, Raymond (Ab'd'n S) Vaughan, Sir Gerard
Robinson, Mark (Somerton) Viggers, Peter
Roe, Mrs Marion (Broxbourne) Waldegrave, Rt Hon William
Rowe, Andrew (Mid Kent) Walden, George
Rumbold, Rt Hon Dame Angela Walker, Bill (N Tayside)
Ryder, Rt Hon Richard Waller, Gary
Sackville, Tom Ward, John
Sainsbury, Rt Hon Sir Timothy Wardle, Charles (Bexhill)
Scott, Rt Hon Sir Nicholas Waterson, Nigel
Shaw, David (Dover) Watts, John
Shaw, Sir Giles (Pudsey) Whitney, Ray
Shephard, Rt Hon Gillian Whittingdale, John
Shepherd, Colin (Hereford) Widdecombe, Ann
Shepherd, Richard (Aldridge) Wiggin, Sir Jerry
Shersby, Michael Willetts, David
Sims, Roger Winterton, Mrs Ann (Congleton)
Skeet, Sir Trevor Wolfson, Mark
Smith, Tim (Beaconsfield) Yeo,Tim
Soames, Nicholas Young, Rt Hon Sir George
Spencer, Sir Derek
Spicer, Sir James (W Dorset) Tellers for the Noes:
Spicer, Michael (S Worcs) Mr. Bowen Wells and
Spink, Dr Robert Mr. Timothy Wood

Question accordingly negatived.

Mr. Malcolm Bruce (Gordon)

I beg to move amendment No. 28, in page 164, leave out lines 31 and 32.

The First Deputy Chairman

With this, it will be convenient to discuss the following amendments: No. 32, in page 164, line 38, at end insert— '3A. In paragraph 21 of Schedule 2 to the 1994 Act the following shall be inserted after sub-paragraph (b)—"and, (c) for the purposes of agriculture, horticulture, and forestry.".'. Government amendments Nos. 42 and 43.

No. 35, in page 172, leave out lines 44 and 45.

No. 36, in page 173, leave out lines 14 to 19.

Mr. Bruce

This is an innocuous little amendment in terms of its place on the amendment paper and its length, but it is very important. It is astonishing that the Government should have thought that it would be possible to put into the Finance Bill the provisions which are enshrined in the lines that we wish to take out without accepting that that would create considerable concern in the farming community. The exemption of farm vehicles from vehicle excise duty dates back to the 1920s. No Government have seriously considered changing that. Suddenly, without notice, farmers find that they are faced with having to pay vehicle excise duty on all farm vehicles. At least that was the situation until a couple of days ago, and I will refer to that matter in a minute.

I am sure that hon. Members who have connections with farming or agricultural interests will know of a number of matters which are relevant to farm vehicles and which are the reason for exemptions having been granted for so many years. A significant number of agricultural vehicles are used for only a few weeks of the year. Some combine harvesters might be used for only a few days a year. The Government now propose that farmers must pay the full rate of vehicle excise duty on them, which seems to be unreasonable and unfair. The previous ruling was that the exemption was restricted to vehicles that travelled no more than six miles from their point of registration.

Given the changes in agricultural holdings in recent years, there are fewer farms where there is no reason to take agricultural vehicles on to a public road simply to carry out the basic business of running a farm, because a farm straddles a public road, because fields can be reached only by going along a public road, or, increasingly, because holdings are physically detached and might be a mile or two apart.

In such circumstances, a very modest farmer might be expected to find vehicle excise duty for three, four or five vehicles for which he has never previously had to consider such a payment and for which there has been no warning, no discussion, no consultation and no sign that the Government were considering it. There has been no opportunity for farmers or their representatives in the National Farmers Union to make representations about the implications or to seek exemption or modification. That is reprehensible.

I represent a constituency in Scotland. Of course there are prosperous Scottish farmers. There are farmers for whom paying vehicle excise duty on three, four or five vehicles is a relatively small charge to their businesses, but there are an awful lot more farmers for whom that is a significant burden on top of other matters with which they must cope. In Scotland, 95 per cent. of agricultural land is in less-favoured areas. By definition, therefore, such farms require subsidy. The Government are providing a subsidy with one hand and clawing it back in additional taxes with the other hand. That does not seem to be fair, reasonable or even sensible.

8.45 pm

In the past few weeks, Scottish farmers have had a problem with sheep annual premiums that have not been paid, even though they have been paid throughout England and Wales. Scottish farmers were promised them in October-November. Two thousand farmers are due £8 million, but they have received no payment whatever, and they are told that the Scottish Office is unable to tell them when they might be paid, and that it could be some time after Easter.

On average, that sum works out at £4,000 per head. It relates only to partnerships, but a partnership business is often a husband and wife or, possibly, a son or a daughter. Such businesses are being deprived of £12,000 of basic salary. Farm support income has been cut, hill livestock compensation allowances have been cut, and farmers now have to pay additional taxes. That is unreasonable and unfair, especially without adequate consultation or consideration.

I welcome one matter. It is clear that, after we tabled our amendment, vibrations got through to the Treasury that perhaps there was a potential problem and that there was some resistance and resentment. The National Farmers Union has been busy, no doubt, contacting hon. Members with agricultural interests to point out the implications of the clause and schedule.

When we tabled our amendment, at least two Conservative Members put their names to it, as well as tabling their own amendment. Surprise, surprise, a couple of days later, the Paymaster General, apart from writing notes to several hon. Members, tabled his own amendment, which provides exemptions for all-terrain vehicles—no doubt he will tell us more about his proposals—and light farm vehicles. That is welcome. It is a recognition that the Government have overstretched the point, that they have not considered the matter, and that there is a need to respond. However, welcome as that response is, it means that all the arguments that I have put will still apply to the majority of farm vehicles affecting the majority of farms and farmers.

In those circumstances, our amendment is justified and desirable. That remains the view of the National Farmers Union, which also welcomes the pressure that has been brought to bear by hon. Members and which has generated a response from the Government. I always welcome evidence that action in the House is observed, acknowledged and responded to, and I give due credit to it.

Conservative Members who take the view that the Government amendment is adequate will find that the NFU does not agree, and many of their local farmers will tell them that the amendment neither affects nor benefits them. Farmers are faced with additional charges which have been introduced without warning or consultation at a time when Government support for many farmers is being withdrawn.

It is a little mischievous of the Government to cut subsidies while trying to claw back additional taxes from farmers. Why has a measure which has been accepted for 70 years suddenly been brought into the net? It does not seem reasonable or fair. The Government may have acknowledged that their proposal as it stands is unreasonable and needs qualification. It would be helpful if the Minister undertook to take the measure away, to consult farmers and their interests, and to bring it back in a form which takes account of those consultations.

I understand that one of the Government's arguments is that the administration of the scheme is somewhat bureaucratic. For 70 years, farmers have been perfectly happy to handle that bureaucracy and I have had no complaints about it from any farmer. It is funny that people in general think that bureaucracy is not a bad thing when they get a tax rebate, and that they are only opposed to it when they face a tax imposition. The serious point is that, if there is a bureaucratic problem, it can be addressed.

The NFU has suggested that a possible solution is a one-off registration with a requirement to notify changes. Nevertheless, the subject of bureaucracy was raised by the Minister after the Finance Bill was published, and no doubt there was justification. The matter has not, I understand, been raised by farmers' representatives complaining about the existing system. The NFU has simply responded to the Minister's assertion.

A significant change has been introduced after 70 years of unchallenged and accepted practice, without warning or consultation. The Government could simply say that they still want the measure—if that is their position—but that they accept that it has implications which they had not fully considered. The measure is clearly resented within the farming community, and it is felt to be a burden for which the Government have not made a case to justify the change.

The Government should take the measure away, reconsider it and possibly bring it back in a revised form after consultation. I would rather that they did not bring it back at all, but consultation has not taken place and I hope that the Minister accepts that it should now take place. Whether we press the amendment to a vote tonight will depend to a significant extent on the Minister's response, but I hope that he accepts that farmers are extremely unhappy about the way in which the measure is being introduced.

Mr. Heathcoat-Amory

Government amendment No. 42 is, I think, entirely uncontroversial and removes an anomaly which might otherwise mean that a local authority which used tractors simply for the maintenance of roadside verges, hedges and trees would have to license them as haulage vehicles, and thus pay vehicle excise duty. They would also lose their entitlement to rebated diesel. As a result of the amendment, they will continue to enjoy their existing concessions to license them as agricultural tractors, and they will therefore pay £35 tax and use rebated diesel.

Government amendment No. 43 concerns the all-terrain vehicles which are familiar to any hon. Member with an agricultural constituency. The vehicles have increased in use, and are now a common sight on hills where sheep are rounded up or hay is delivered. This is a clear example of where the old concessionary classes have simply not anticipated the development of such vehicles. If the legislation were being laid down today, those vehicles would undoubtedly be considered a form of small lightweight tractor. Under the amendment, we propose to recognise that farmers do use ATVs like tractors and, accordingly, we define them as light agricultural vehicles. That means that they will be taxed in the £35 a year class and, although most of them are petrol-powered, a number which are diesel-powered will be able to use rebated fuel because of the amendment.

The other issue touched on by the hon. Member for Gordon (Mr. Bruce) concerns the low-mileage vehicles which are often used by farmers between fields on a single farm. The legislation as drafted required farmers to pay vehicle excise duty for the first time. Most of the vehicles, of course, are tractors and therefore the duty was only £35. I must make it clear to the Committee that the proposals are not in this case driven by the need for extra revenue, but to end anomalies and to find a system which is administratively workable.

I must make clear at the outset that the current system for the vehicles—whereby exemption is based supposedly on the vehicles doing fewer than six miles a week on public roads—cannot continue. It is self-evidently impossible to police the scheme. It may be possible for a police officer to stop a vehicle and check its distance, but it is certainly impossible when the criteria for evasion is not just distance, but time and how many miles have been covered by that vehicle during the week. It will not surprise the Committee to know that prosecutions are unknown.

The scheme is bureaucratic in the extreme. I have with me one of the forms which must be filled out each year by people claiming the concession. Of course, they do not complain about it. As the hon. Member for Gordon fairly said, who would complain about filling in a form if it means that one does not have to pay tax? However, it cannot be good taxation if every year, a person claiming the concession must fill in a detailed description of the route to be travelled, and any divergence or detour from that route—because of a temporarily blocked road, for example—must be sent in writing to the authority before that concession can continue.

Hon. Members with agricultural constituencies will know what I mean when I say that, in private, farmers often concede that there is a certain amount of abuse of that concession. It is difficult for the authorities and bureaucratic for the users.

I am not wedded to the concept of taxing genuine cases, however, when vehicles necessarily have to cross main roads in the course of business. If trade organisations—the National Farmers Union, Country Landowners Association and other trade groups—or hon. Members can come up with a system that involves none of the form filling, is workable and administratively simple and prevents evasion, I will willingly consider it in time to table an amendment on Report.

Mr. David Harris (St. Ives)

Before my hon. Friend sits down—

The First Deputy Chairman

Order. The Minister has sat down.

Sir David Mitchell (Hampshire, North-West)

First, I warmly welcome what the Minister said about all-terrain vehicles, as those were causing some anxiety in the fanning community and his words will be widely welcomed.

On exemptions from normal vehicle excise duty for certain agricultural vehicles, I have much sympathy with the Chancellor's wish to tighten the rules and to lessen abuse of former concessions that allowed six miles per week and were misused, especially as regards livestock. One could say that farmers have brought the problems on themselves because of the widespread abuse of the system, but the change means that the majority of law-abiding farmers are being penalised because of an unscrupulous minority.

9 pm

I must draw two genuine problems to the Minister's attention. The first concerns the substantial vehicle excise duty and the second, the subsequent need to MOT a vehicle to motorway standards, when it will be used merely for crossing a farm road or up a narrow lane to get to another part of the farm. Technically, the first change in vehicle excise duty would result in a further change in the MOT requirements. Those should not apply to harvest vehicles and others of that type.

I have here a letter from a farmer in my constituency, who says that I should be aware that many farm harvest lorries have been un-MOT'd within the exempt ruling law, but will in future have to pay licence duty but also be liable to MOT to motorway standards. There must be many farmers with harvest grain transport trucks who will not MOT their vehicles to MOT motorway standard. We run two lorries for harvest work—that is all. Should the law change we would have to purchase two 14 ton trailers and hire two tractors—a considerable cost to their farming enterprise.

I also want to draw the Minister's attention to the views of the Country Landowners Association on "agricultural off-road vehicles", which is how it wants them to be described. I was glad to hear my hon. Friend say that he was open to suggestions. It suggests: The licence will only be valid within, say, x miles of the owner's place of business (the exact amount of miles to be determined by the distance from the postal address of the business to the furthest outlying field in the farm". The licence disc should be a special colour and include the address of the place of business so that if the vehicle is stopped on the public highway it should be immediately obvious to any policeman whether or not the licence is valid. The inclusion of the business address would avoid the policing difficulties that have been encountered and which the Minister mentioned.

I should have thought that that change from X miles per week to a specific distance from a farmhouse or tractor store to the boundaries of the farm plus two miles would eliminate the major problem to which my hon. Friend the Minister drew our attention. Will he consider that suggestion and consult the NFU, the CLA and other interests, as he said he would? I hope that he will be able to table an amendment at a later stage as a result of his consultations.

Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury)

I must place it on record that I am grateful to my hon. Friend the Minister for the courteous way in which he received me last week to make representations on vehicle excise duty exemption for agricultural vehicles.

I am also grateful for his announcement that he will consider further representations from the Country Landowners Association, the National Farmers Union and colleagues. Perhaps I should declare an interest, as I am a member of the NFU and the CLA.

I endorse some of the arguments by my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell). The Bill removes schedule 2, paragraph 21 of the Vehicle and Excise Registration Act 1994. It is worth dwelling for a minute or two on what we are doing and what we are abolishing. As the hon. Member for Gordon (Mr. Bruce) said, the provisions have been in place for 70 years. Paragraph 21 of schedule 2 to the 1994 Act states: Where an applicant for a vehicle licence for a vehicle satisfies the Secretary of State that the vehicle is intended to be used on public roads—

  1. (a) only in passing from land in his occupation to other land in his occupation, and
  2. (b) for distances not exceeding an aggregate of six miles in any calendar week,
the Secretary of State may, with the consent of the Treasury, declare that the vehicle is an exempt vehicle when it is being used on public roads as mentioned in paragraphs (a) and (b). So we are abolishing a concise and precise exemption, which has been in operation for 70 years for a good reason. The reason is that the agricultural business involves travelling from one piece of land to another. It therefore seems onerous that farmers should suddenly be brought into the licensing net.

I understand the Minister's explanation that, by abolishing the exemption, he is making the law easier to enforce and police. It is generally acknowledged that the current concessions are widely abused, so we must come up with a better system, but I hope that he will listen carefully to suggestions made by the agricultural industry because, in some cases, the abolition of the concession will cause hardship.

The schedule shows that proposals with respect to some restricted HGV lorries, which may be used only on odd occasions in a year, such as during the harvest period or to transport a few sheep from one piece of land to another, could mean that a farmer who currently pays nothing may pay up to several thousand pounds under the new system. I accept that most tractors and agricultural vehicles, such as combines, will, under the concessions granted in the Bill, pay only £35. Under those circumstances, the obligation for farmers is not too onerous, but small farmers who must pay substantially more than £35 for HGVs which are used only on the odd occasion each year and which may only cross a road, may suffer hardship.

My hon. Friend the Minister already mentioned some of the ways in which the exemption could be kept. The Bill provides a new definition for "tractors" and makes it clear that we are dealing with vehicles that can travel at only up to 25 miles an hour, except the concession for ATVs, which I warmly welcome. As it is therefore unlikely that anyone in his right mind will drive those tractors or combine harvesters far on a public road, it must be possible to come up with a system whereby farmers apply for a normal licence but answer a question on the licence form about why they should be entitled to the exemption.

The exemption would specify the address from which the vehicle operated, and it would be reasonable to have a different colour licence that specified up to what range the vehicle could go. I urge my hon. Friend the Minister to give that idea serious consideration. If a vehicle crosses a road only once or twice a year, it is unnecessary to go through the rigmarole of paying a considerable extra amount.

Sir David Mitchell

Does my hon. Friend accept that it is not just a case of crossing a road through a farm, but it may be a case of going a short distance along a road to enter another field?

Mr. Clifton-Brown

I entirely accept that.

My suggestion about how the matter could be implemented and enforced by the police so that it would not be abused as at present would be less bureaucratic and easier to enforce than the present arrangement.

May I make a final plea to the Minister? I understand that the Department of Transport is carrying out an investigation into which agricultural vehicles should be subject to the MOT and what provisions should apply to them. It is ludicrous to suggest that combine harvesters should jam up MOT testing stations which are not big enough to cope with them in any case. I hope that my right hon. Friend will make representations to his colleagues in the Department of Transport to ensure that those types of agricultural vehicles will not be subject to the same testing and plating regulations that currently apply to commercial vehicles.

Mr. Nick Ainger (Pembroke)

I support amendment No. 28. I represent a farming constituency in west Wales and the representations that I have received from my constituents about vehicle excise duty have led me to believe that the Government have made a big mistake in not accepting the opposing arguments that have been advanced. Following tonight's debate, I hope that they will begin to listen both to their own Back Benchers and to the Opposition.

Farmers throughout the country are saying, "What has the Tory party got against the farming industry?" At the end of last year, the Government announced that hill livestock compensatory allowances would not be increased, even though hill farming incomes had declined by more than 20 per cent., and they also cut grant aid for pollution measures. That shows that, for some reason, farmers are not particularly popular with the Government.

As several hon. Members have said, the Government should have consulted widely before introducing the proposal to remove farm vehicles from the exemption from duty. We are not talking just about tractors or heavy goods vehicles; Britain has a successful, specialised farm sector and the farm engineering industry has produced an enormous range of vehicles to service it. One has only to visit agricultural shows every summer to see the enormous range of specialist vehicles that are now available to farmers.

Most of the vehicles are designed to perform a specific function and cannot be used for any other task. Recent developments with large bales of hay and silage require the use of extremely specialised vehicles and there is no question but that such vehicles can be used only on the farm to perform legitimate farm business.

In order to run a successful enterprise, farmers must own a great variety of farm vehicles—these are usually well maintained, although sometimes, sadly, they are not. Because of the Government's move, the introduction of MOT and the licensing of farm vehicles as HGVs may impose enormous costs on farmers.

The Paymaster General has said that the measure was introduced not to raise revenue but to address certain anomalies in the system. As I said earlier, I am sure that he could have addressed those anomalies by consulting with the farm unions and the Country Landowners Association and coming up with some more favourable, concrete proposals.

Several Government Members have made very sensible suggestions about how those anomalies could be addressed and, at the same time, how the Government could reduce the size of the bureaucracy and solve enforcement problems. I urge the Paymaster General to listen not just to what the Opposition are saying but to his own Back Benchers and to bring forward a sensible amendment to solve all our problems.

Dame Elaine Kellett-Bowman (Lancaster)

I agree with my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown). I must declare an interest in the debate as I am a farmer and I have to cross a road in order to get to part of my land. It is outrageous to suggest that I should have to license my farm vehicles in order to do so; and many of my farming constituents are in a similar position.

I do not wish to annoy my hon. Friend unduly, but I must point out that small farmers such as those I represent often do not buy new machinery—we rely on wealthy farmers like him to sell us their second-hand machinery. Therefore, we are the ones who will be clobbered by the MOT; his vehicles are new.

Mr. Clifton-Brown


Dame Elaine Kellett-Bowman

I cannot give way to my hon. Friend. I have been told that I must be brief.

Such an imposition would be disastrous. Some farmers use combine harvesters that are 20 years old. That machinery could not be expected to pass the MOT test, yet it does a perfectly good job of bringing in the harvest. The same applies to silage-making machinery—it may not be new, but it works. To insist on MOT testing would be outrageous. I ask my hon. Friend the Paymaster General to temper the wind to the shorn sheep. It would be difficult for some farmers to go through all that rigmarole, and I hope that my hon. Friend will think again.

9.15 pm
Mr. Alan Haselhurst (Saffron Walden)

I emphasise the comments of my right hon. and hon. Friends, and welcome the indication by my hon. Friend the Paymaster General that he is prepared to re-examine the issue. He did so in sufficiently open terms to satisfy the hon. Member for Gordon (Mr. Bruce).

Mr. Malcolm Bruce

indicated dissent.

Mr. Haselhurst

The hon. Gentleman is not as reasonable as he presents himself to the Committee. My hon. Friend said that he is prepared to consult. I find that satisfactory, and I am sure that that is true of the farmers in my constituency.

As my hon. Friend said, it is not primarily a revenue-raising matter. I wonder whether it is such a burning issue that it must be resolved for the purpose of removing an anomaly. In so far as there has been an increase in diesel and petrol duties, any extra mileage covered by such vehicles will cost farmers more in any case—so additional revenue will be raised if there is the supposed abuse of the present system.

The point has been made well that certain vehicles are used so little that it would be unreasonable to impose on them the panoply of taxation and regulation. I hope that a common-sense solution can be found. We should be attempting not to remove anomalies but to find a sensible answer relevant to the needs of the industry.

Mr. Heathcoat-Amory

I am fully persuaded by the Committee that there is a good, strong case for trying to, find a way of responding to the case for agricultural vehicles that occasionally cross public roads or travel short distances along them. The present system is administratively too complex, and more or less impossible to enforce. In the pursuit of good government and administration, we must find a better way of granting exemptions, and one that is easy to understand and possible to enforce. Together with the industry and other hon. Members, I shall seek a way forward over the next few weeks.

My hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell) and others raised the question of MOT testing. It is my understanding that no requirement exists for tractors or harvesters, but vehicles such as lorries that are used on public roads even for short distances must meet MOT test basic safety requirements. My hon. Friend's former Department, the Department of Transport, is examining the whole question of vehicle testing. It may even be that he started that review, given that the good that Ministers do is generally harvested by those who succeed them. I undertake to draw to the Department's attention the remarks made by members of the Committee this evening.

Mr. Malcolm Bruce

The Minister seems a little confused. He accepts that the matter should be reconsidered but places the onus for devising alternative options on hon. Members and farmers' representatives rather than on the Government and civil servants, who have the resources and responsibility for doing that. When a Minister says, "I accept that this matter needs to be reconsidered," he usually accepts also the amendment to remove the measure in question, so that he can return with revised proposals after consulting. The Minister has introduced a measure granting exemption across the board to all-terrain vehicles. They are precisely the kind of vehicles whose owners can abuse the system—yet they are to be entirely exempt.

A farmer who keeps a combine harvester, however, will in future have to pay tax, as will farmers who keep balers or hayrollers on their farms. The Minister has acknowledged that that is unreasonable. His hon. Friends have said that they are unhappy with the idea, but they have more confidence than I do that the Minister will come up with an answer.

Dame Elaine Kellett-Bowman

I am puzzled by the hon. Gentleman's reference to haybalers. Usually they are towed vehicles, not self-propelled.

Mr. Bruce

The hon. Lady knows perfectly well that all sorts of farm machines never leave the farm but will now be taxed. She herself has said that this is an unreasonable proposal—

Mr. Heathcoat-Amory

The hon. Gentleman seems confused. If vehicles never travel on public roads, there is no question of catching them—that is certainly not our proposal.

Mr. Bruce

As I said earlier, farms are increasingly divided by public roads, or farmers need to use roads to gain access to other fields, separate from the farm. It is extraordinary that a rule which has worked perfectly satisfactorily for 70 years should suddenly be abolished without notice or consultation.

Mr. A. J. Beith (Berwick-upon-Tweed)

I hope that my hon. Friend will bear in mind the fact that some farmers, such as those with farms along the A1, have chunks of public roads through their farms, and thus find that they have to move combine harvesters from one field to another along busy dual carriageways, as well as bearing a tax burden for doing so. If the Government think that farm vehicles can be moved about the farm without going on public roads, they do not know much about farming.

Mr. Bruce

I agree. A number of farms in my constituency, for instance, are divided up by a railway line. Until the Government decided to privatise the railways, the farmers were allowed free access across the line, but British Rail now refuses to grant that access. Farmers are thus forced to go many miles around to get to fields on the other side of the line—and the Government now insist that the vehicles used for such journeys pay VED.

My main point is a simple one: the Government and the Minister have said that they accept that there is a problem. The Minister has admitted that wide consultation has not taken place. He has said that he is willing to hear alternative proposals. I suggest that he accept the amendment, consult and then consider the position. If he is not prepared to rise to his feet now and do that, we shall have no hesitation in pressing the matter to a vote.

Question put, That the amendment be made:—

The Committee divided: Ayes 229, Noes 277.

Division No. 56 [9.22 pm
Adams, Mrs Irene Dobson, Frank
Ainger, Nick Donohoe, Brian H
Ainsworth, Robert (Cov'try NE) Dowd, Jim
Allen, Graham Dunwoody, Mrs Gwyneth
Alton, David Eagle, Ms Angela
Anderson, Donald (Swansea E) Eastham, Ken
Armstrong, Hilary Enright, Derek
Ashdown, Rt Hon Paddy Etherington, Bill
Ashton, Joe Evans, John (St Helens N)
Austin-Walker, John Ewing, Mrs Margaret
Banks, Tony (Newham NW) Field, Frank (Birkenhead)
Barnes, Harry Fisher, Mark
Battle, John Flynn, Paul
Bayley, Hugh Foster, Rt Hon Derek
Beckett, Rt Hon Margaret Foulkes, George
Beith.Rt Hon A J Fyfe, Maria
Bell, Stuart Galbraith, Sam
Benn, Rt Hon Tony Galloway, George
Benton, Joe Gapes, Mike
Bermingham, Gerald George, Bruce
Berry, Roger Gerrard, Neil
Boyes, Roland Gilbert, Rt Hon Dr John
Bradley, Keith Godman, Dr Norman A
Bray, Dr Jeremy Godsiff, Roger
Brown, Gordon (Dunfermline E) Golding, Mrs Llin
Brown, N (N'c'tle upon Tyne E) Graham, Thomas
Bruce, Malcolm (Gordon) Grant, Bernie (Tottenham)
Burden, Richard Griffiths, Nigel (Edinburgh S)
Byers, Stephen Grocott, Bruce
Caborn, Richard Gunnell, John
Callaghan.Jim Hall, Mike
Campbell, Mrs Anne (C'bridge) Hanson, David
Campbell, Menzies (Fife NE) Harman, Ms Harriet
Campbell, Ronnie (Blyth V) Harvey, Nick
Campbell-Savours, D N Heppell, John
Canavan, Dennis Hill, Keith (Streatham)
Cann, Jamie Hinchliffe, David
Chidgey, David Hodge, Margaret
Chisholm, Malcolm Hoey, Kate
Clapham, Michael Hoon, Geoffrey
Clark, Dr David (South Shields) Hoyle, Doug
Clarke, Eric (Midlothian) Hughes, Kevin (Doncaster N)
Clarke, Tom (Monklands W) Hughes, Robert (Aberdeen N)
Clelland, David Hutton,John
Clwyd, Mrs Ann Illsley, Eric
Coffey, Ann Ingram, Adam
Cohen, Harry Jackson, Glenda (H'stead)
Connarty, Michael Jackson, Helen (Shef'ld, H)
Cook, Robin (Livingston) Jamieson, David
Corbett, Robin Janner, Greville
Corbyn, Jeremy Jones, Barry (Alyn and D'side)
Cousins, Jim Jones, Jon Owen (Cardiff C)
Cunningham, Jim (Covy SE) Jones, Martyn (Clwyd, SW)
Dalyell, Tam Jones, Nigel (Cheltenham)
Darling, Alistair Jowell, Tessa
Davidson, Ian Kaufman, Rt Hon Gerald
Davies, Bryan (Oldham C'tral) Keen, Alan
Davies, Rt Hon Denzil (Llanelli) Kennedy, Charles (Ross,C&S)
Denham, John Kennedy, Jane (Lpool Brdgn)
Dixon, Don Khabra, Piara S
Kilfoyle, Peter Prentice, Bridget (Lew'm E)
Kirkwood, Archy Prescott, Rt Hon John
Lestor, Joan (Eccles) Primarolo, Dawn
Lewis, Terry Purchase, Ken
Liddell, Mrs Helen Quin, Ms Joyce
Lloyd, Tony (Stretford) Radice, Giles
Llwyd, Elfyn Randall, Stuart
Loyden, Eddie Raynsford, Nick
Lynne, Ms Liz Reid, Dr John
McAllion, John Rendel, David
McAvoy, Thomas Robertson, George (Hamilton)
McCartney, Ian Robinson, Geoffrey (Co'try NW)
McCrea, The Reverend William Rooker, Jeff
Macdonald, Calum Rooney, Terry
McKelvey, William Ross, Ernie (Dundee W)
Mackinlay, Andrew Ross, William (E Londonderry)
Maclennan, Robert Ruddock, Joan
MacShane, Denis Salmond, Alex
Madden, Max Sedgemore, Brian
Mahon, Alice Sheldon, Rt Hon Robert
Mandelson, Peter Shore, Rt Hon Peter
Marek, Dr John Short, Clare
Marshall, David (Shettleston) Skinner, Dennis
Martin, Michael J (Springburn) Smith, Andrew (Oxford E)
Martlew, Eric Smith, Chris (Isl'ton S & F'sbury)
Maxtor, John Smith, Llew (Blaenau Gwent)
Meacher, Michael Snape, Peter
Meale, Alan Soley, Clive
Michie, Bill (Sheffield Heeley) Spearing, Nigel
Michie, Mrs Ray (Argyll & Bute) Spellar, john
Milburn, Alan Squire, Rachel (Dunfermline W)
Miller, Andrew Steel, Rt Hon Sir David
Steinberg, Gerry
Mitchell, Austin (Gt Grimsby) Stevenson, George
Molyneaux, Rt Hon James Strang, Dr. Gavin
Moonie, Dr Lewis Sutcliffe, Gerry
Morgan, Rhodri Taylor, Matthew (Truro)
Morley, Elliot Timms, Stephen
Morris, Rt Hon Alfred (Wy'nshawe) Tipping, Paddy
Morris, Rt Hon John (Aberavon) Turner, Dennis
Mudie, George Vaz, Keith
Mullin, Chris Walker, Rt Hon Sir Harold
Oakes, Rt Hon Gordon Wallace, James
O'Brien, William (Narmanton) Wardell, Gareth (Gower)
O'Hara, Edward Wareing, Robert N
Olner, Bill Watson, Mike
O'Neill, Martin Wigley, Dafydd
Orme, Rt Hon Stanley Willams, Rt Hon Alan (SW'n W)
Paisley, The Reverend Ian Wiliams, Alan W (Carmarthen)
Parry, Robert Wilson, Brian
Patchett, Terry Wise, Audrey
Pearson, Ian Worthington, Tony
Pendry, Tom Wright, Dr Tony
Pickthall, Colin
Pike, Peter L Tellers for the Ayes:
Pope, Greg Mrs. Diana Maddock and
Powell, Ray (Ogmore) Mr. Don Foster
Ainsworth, Peter (East Surrey) Bellingham, Henry
Aitken, Rt Hon Jonathan Bendall, Vivian
Alison, Rt Hon Michael Beresford, Sir Paul
Amess, David Biffen, Rt Hon John
Ancram, Michael Booth, Hartley
Arbuthnot, James Boswell, Tim
Arnold, Jacques (Gravesham) Bottomley, Peter (Eltham)
Arnold, Sir Thomas (Hazel Grv) Bottomley, Rt Hon Virginia
Ashby, David Bowden, Sir Andrew
Atkins, Robert Bowis, John
Atkinson, Peter (Hexham) Boyson, Rt Hon Sir Rhodes
Baker, Nicholas (North Dorset) Brandreth, Gyles
Baldry, Tony Brazier, Julian
Banks, Matthew (Southport) Bright, Sir Graham
Banks, Robert (Harrogate) Brooke, Rt Hon Peter
Bates, Michael Brown, M (Brigg & Cl'thorpes)
Batiste, Spencer Browning, Mrs Angela
Bruce, Ian (Dorset) Hargreaves, Andrew
Budgen, Nicholas Harris, David
Burns, Simon Haselhurst, Alan
Butcher, John Hawkins, Nick
Butler, Peter Hawksley, Warren
Butterfill, John Hayes, Jerry
Carlisle, John (Luton North) Heald,Oliver
Carlisle, Sir Kenneth (Lincoln) Heath, Rt Hon Sir Edward
Carrington, Matthew Heathcoat-Amory, David
Carttiss, Michael Hendry, Charles
Cash,William Higgins, Rt Hon Sir Terence
Channon, Rt Hon Paul Hill, James (Southampton Test)
Chapman, Sydney Hogg, Rt Hon Douglas (G'tham)
Churchill, Mr Horam, John
Clappison, James Hordern, Rt Hon Sir Peter
Clark, Dr Michael (Rochford) Howard, Rt Hon Michael
Clarke, Rt Hon Kenneth (Ru'clif) Howarth, Alan (Strat'rd-on-A)
Clifton-Brown, Geoffrey Howell, Rt Hon David (G'dford)
Congdon, David Hughes, Robert G (Harrow W)
Conway, Derek Hunt, Rt Hon David (Wirral W)
Coombs, Anthony (Wyre For'st) Hunter, Andrew
Coombs, Simon (Swindon) Hurd, Rt Hon Douglas
Cope, Rt Hon Sir John Jack, Michael
Cormack, Sir Patrick Jackson, Robert (Wantage)
Couchman, James Jenkin, Bernard
Cran, James Jessel, Toby
Currie, Mrs Edwina (S D'by'ire) Jones, Gwilym (Cardiff N)
Curry, David (Skipton & Ripon) Jones, Robert B (W Hertfdshr)
Davies, Quentin (Stamford) Kellett-Bowman, Dame Elaine
Day, Stephen Key, Robert
Dicks, Terry King, Rt Hon Tom
Dorrell, Rt Hon Stephen Kirkhope, Timothy
Douglas-Hamilton, Lord James Knapman, Roger
Dover, Den Knight, Mrs Angela (Erewash)
Duncan, Alan Knight Greg (Derby N)
Duncan Smith, Iain Knox, Sir David
Dunn, Bob Kynoch, George (Kincardine)
Dykes, Hugh Lait, Mrs Jacqui
Elletson, Harold Lang, Rt Hon Ian
Emery, Rt Hon Sir Peter Lawrence, Sir Ivan
Evans, David (Welwyn Hatfield) Legg, Barry
Evans, Jonathan (Brecon) Leigh, Edward
Evans, Nigel (Ribble Valley) Lennox-Boyd, Sir Mark
Evans, Roger (Monmouth) Lester, Jim (Broxtowe)
Evennett, David Lidngton, David
Faber, David Lightbown, David
Fabricant Michael Lilley, Rt Hon Peter
Field, Barry (Isle of Wight) Lloyd, Rt Hon Sir Peter (Fareham)
Fishburn, Dudley Lord, Michael
Forman, Nigel Luff, Peter
Forsyth, Rt Hon Michael (Stirling) Lyell, Rt Hon Sir Nicholas
Forth, Eric MacGregor, Rt Hon John
Fowler, Rt Hon Sir Norman MacKay, Andrew
Fox, Dr Liam (Woodspring) Maclean, David
Fox, Sir Marcus (Shipley) McLoughlin, Patrick
Freeman, Rt Hon Roger McNair-Wilson, Sir Patrick
French, Douglas Madel, Sir David
Gale, Roger Maitland, Lady Olga
Gallie, Phil Malone, Gerald
Gardiner, Sir George Mans, Keith
Garnier, Edward Marland, Paul
Gill, Christopher Marlow, Tony
Gillan, Cheryl Marshall, John (Hendon S)
Goodson-Wickes, Dr Charles Marshall, Sir Michael (Arundel)
Gorman, Mrs Teresa Martin, David (Portsmouth S)
Gorst, Sir John Mates, Michael
Grant, Sir A (SW Cambs) Mellor, Rt Hon David
Greenway, Harry (Ealing N) Merchant, Piers
Greenway, John (Ryedale) Mils, Iain
Griffiths, Peter (Portsmouth, N) Mitchell, Andrew (Gedling)
Grylls, Sir Michael Mitchell, Sir David (NW Hants)
Hague, William Moate, Sir Roger
Hamilton, Neil (Tatton) Monro, Sir Hector
Hampson.Dr Keith Montgomery, Sir Fergus
Hanley, Rt Hon Jeremy Moss, Malcolm
Hannam, Sir John Needham. Rt Hon Richard
Nelson, Anthony Spring, Richard
Neubert, Sir Michael Sproat Iain
Newton, Rt Hon Tony Squire, Robin (Hornchurch)
Nicholls, Patrick Stanley, Rt Hon Sir John
Nicholson, David (Taunton) Steen, Anthony
Nicholson, Emma (Devon West) Stephen, Michael
Norris, Steve Stern, Michael
Onslow, Rt Hon Sir Cranley Stewart, Allan
Opponheim, Phillip Streeter, Gary
Page, Richard Sumberg, David
Paice, James Sweeney, Walter
Patten, Rt Hon John Sykes,John
Pattie, Rt Hon Sir Geoffrey Tapsell, Sir Peter
Peacock, Mrs Elizabeth Taylor, Ian (Esher)
Pickles, Eric Taylor, John M (Solihull)
Porter, Barry (Wirral S) Temple-Morris, Peter
Porter, David (Waveney) Thomason, Roy
Portillo, Rt Hon Michael Thompson, Patrick (Norwich N)
Powell, William (Corby) Thornton, Sir Malcolm
Redwood, Rt Hon John Thurnham, Peter
Richards, Rod Townsend, Cyril D (Bexl'yh'th)
Riddick, Graham Tracey, Richard
Robathan, Andrew Tredinnick, David
Roberts, Rt Hon Sir Wyn Trend, Michael
Robertson, Raymond (Ab'd'n S) Twinn, Dr Ian
Robinson, Mark (Somerton) Vaughan, Sir Gerard
Roe, Mrs Marion (Broxbourne) Viggers, Peter
Rowe, Andrew (Mid Kent) Waldegrave, Rt Hon William
Rumbold, Rt Hon Dame Angela Walden, George
Ryder, Rt Hon Richard Walker, Bill (N Tayside)
Sackville, Tom Waller, Gary
Sainsbury, Rt Hon Sir Timothy Ward, John
Scott, Rt Hon Sir Nicholas Wardle, Charles (Bexhill)
Shaw, David (Dover) Waterson, Nigel
Shaw, Sir Giles (Pudsey) Watts, John
Shephard, Rt Hon Gillian Whitney, Ray
Shepherd, Colin (Hereford) Whittingdale, John
Shepherd, Richard (Aldridge) Widdecombe, Ann
Shersby, Michael Wiggin, Sir Jerry
Sims, Roger Winterton, Mrs Ann (Congleton)
Skeet, Sir Trevor Wolfson, Mark
Smith, Tim (Beaconsfield) Wood, Timothy
Soames, Nicholas Yeo,Tim
Spencer, Sir Derek Young, Rt Hon Sir George
Spicer, Sir James (W Dorset) Tellers for the Noes:
Spicer, Michael (S Worcs) Mr. Bowen Wells and
Spink, Dr Robert Mr. David Willetts

Question accordingly negatived.

Mr. Matthew Taylor (Truro)

I beg to move amendment No. 29, in page 165, line 10, at end insert— '(c) if it is a vehicle with engine size under 1,200 cc, the fuel efficient rate.'.

The Chairman of Ways and Means (Mr. Michael Morris)

With this, it will be convenient to discuss amendment No. 8, in line 12, at end insert— '(3A) The fuel-efficient rate is 60 per cent. of the general rate.'.

Mr. Taylor

The amendment has two aims. First, it would help those who have been hard hit by rapid increases in petrol prices, a policy that the Government have pursued since the last general election. Secondly, it aims to reinforce the environmental benefits which the Government claim will flow from such changes.

It is ironic that so many Conservative Members attacked the Liberal Democrats during the general election campaign for proposing fuel duty increases because, since the 1992 general election, petrol duty has gone up from 27.79p to 36.14p per litre. That is a 30 per cent. hike and an average increase of 9.1 per cent. a year. When VAT is added to the duty, it means that people are paying nearly 10p a litre, or 44p a gallon, more at the pumps. That is double the rate of increase that we proposed, and those hon. Members—there are some in their places—who attacked us for that policy ought to reflect on their position if there is a vote on the amendment.

The Government claim that their policy is intended to have a material impact on emissions and is part of their drive to tackle our environmental problems, not the least of which are air pollution and global warming; but such increases are a very rough tool with which to seek to achieve those aims. It is calculated that a 10 per cent. increase makes a difference of 1 per cent. or less in the amount of fuel consumed. The tool is relatively ineffective and falls hard on people in rural areas and those who depend on car ownership to get about.

The alternative strategy is to use increases in petrol duty to cut vehicle excise duty. That has clear material benefits. First, it is vastly more effective in terms of the environmental aim. It gives people a direct incentive to invest in cars that are more fuel economic in the band that attracts lower vehicle excise duty. That means that the Government's emission targets can be achieved more effectively. People will have a direct financial incentive to downsize their vehicles.

Ultimately, despite catalytic converters and other efforts to achieve greater fuel efficiency and lower emissions, the best way to cut vehicle emissions is to burn less fuel and only two options would achieve that: we can either directly dissuade people from driving, which is the hard option given the modern society in which we live, or persuade them to drive vehicles that burn less fuel. That is relatively easy with financial incentives.

Everybody knows that a fuel-efficient vehicle will cost less to run, and we can add to that incentive by using revenues from petrol price increases to cut vehicle excise duty. Such cuts have another benefit in that they compensate those who are hardest hit by the Government's policy of increases in fuel duty; the money is put back in their pockets because they do not have to pay so much vehicle excise duty.

Moreover, it is an affordable policy for those on low incomes for example, rural pensioners who need a vehicle to get to the shops and get on with their lives. Such people find it hard to keep a vehicle on the road because of the highs and lows of the expenses of doing so. If VED is cut to a notional level, they will find it easier to afford a vehicle, because at the moment ownership is taxed.

However, those who cover an excessive mileage will pay more, because the use of the vehicle will be taxed. After all, it is the use and not the ownership of the vehicle that is a disbenefit to the wider community, whether it be through congestion or fuel emissions.

The amendment takes a moderate approach to the matter. It accepts that money is tight for the Government. The proposal is for the smallest-engined vehicles only. It suggests only a relatively moderate cut. I should have preferred it if the Government had taken a stronger line on the matter. I should have liked the vehicle excise duty for smaller-engined, more fuel-efficient vehicles to be cut to a notional level—possibly no duty at all, with the policing of vehicle insurance and MOTs transferring to an MOT certificate on the window.

If we considered cutting the duty to a notional level for smaller-engined vehicles, the vast majority of private motorists could easily be substantially better off. Some people find that relatively hard to believe, but let me give an example. If we cut vehicle excise duty to a notional level on vehicles with engines of up to 1300 cc, but put an extra 10p duty on each litre of petrol, as the Government have done in the past few years, running an economical 1300 cc car with an overall fuel consumption of 40 miles per gallon—a real figure that is taken from an actual vehicle—would mean consuming 225 gallons of petrol a year. The extra 10p duty would therefore cost the average rural motorist, who does 9,000 miles a year, £98 a year. He would, however, be a net beneficiary by £37 a year if vehicle excise duty were reduced to a notional level.

Most cars are not as economical as the one in the first example. Imagine a family car owner driving a 2,000 cc estate for 9,000 miles a year, at an average of 30 miles per gallon. On current figures, he pays £132 extra as a result of Government fuel price increases. The high-mileage car owner pays a whopping extra £366 per annum, but, under our policies, half the Tory fuel tax hike would bring in enough revenue to reduce VED to a nominal sum for cars up to 1,500 cc. People driving cars with 2 litre engines and above would not be entitled to any VED reduction, but they would have a substantial incentive to downsize their vehicles, again making substantial cost savings.

The Government need to tackle emissions and to deal with the costs of motoring to the nation. There has been an increase in air pollution and in asthma levels. Increasing numbers of young school children suffer asthma. There is congestion in the cities and even in many rural areas. The Government's policy, however, has almost no impact on those problems, although it takes substantial amounts of money out of pockets, including the pockets of many of the poorest people in society.

There is an alternative. I refuse to believe that Ministers' officials in the Treasury have not argued that abolishing VED and transferring the tax to petrol, so that it is a tax on the use rather than the ownership of a vehicle, makes sense. It makes sense to the people with whom we are most concerned—rural motorists, private motorists and the poorest motorists in particular. Poor motorists in rural areas do an average 7,000 miles a year. They would be clear net beneficiaries from the policies that we advocate.

Mr. Alex Salmond (Banff and Buchan)

I am listening with great care to the hon. Gentleman and I have some sympathy with his remarks, but would not his policy benefit, as he put it, low-mileage motorists at the expense of high-mileage motorists? Would not that therefore tend to benefit urban motorists at the expense of rural motorists? The hon. Gentleman has many statistics. Will he assure me on that point?

9.45 pm
Mr. Taylor

First, let us bear in mind the fact that, if one is prepared to drive a smaller-engined vehicle, which we all want to encourage in order to reduce pollution, one could still be better off doing up to 20,000 miles a year, a substantial mileage. Secondly, we have argued for road-pricing schemes to tackle urban congestion and to encourage and finance the use of public transport, a policy that the Government are now considering. In those circumstances, the rural motorist would be a beneficiary and the urban motorist might well find that he was paying extra, unless he opted to use public transport.

The motorists who would be penalised by such a policy are a rather more specific breed, which may explain why the Government have decided not to pursue it—perhaps they feel that such people are their natural supporters. I refer, of course, to people driving very large-engined vehieles, by themselves, between cities and on a regular basis—in other words, people financed by large companies.

It is not something that we want to encourage, and I suspect that it is not something of which the hon. Member for Banff and Buchan (Mr. Salmond) sees a great deal in his constituency, so I do not think that he need worry. It may, of course, be something in which Members of Parliament have a particular interest, but I generally travel by train between London and my constituency.

Mr. David Nicholson (Taunton)

Has the hon. Gentleman worked out how he would distinguish, in Cornwall or Somerset for example, between urban motorists—people in suburbs or villages perhaps two or three miles from a town—and rural motorists? Where would he draw the line? Would not his suggestion create a new tier of bureaucracy?

Mr. Taylor

The hon. Gentleman has misunderstood. Some people have advocated specific compensation schemes for rural areas, which I do not believe could be made to work. We have argued for urban road pricing in areas of congestion, as the Government are increasingly doing. That is how the particular cost of driving in urban areas would be reflected. For other motorists, we would merely transfer the cost from VED to petrol.

One of the basic principles of environmental protection involves not taxing something that is essentially good. I do not think that anyone would wish to prevent vehicle ownership; we seek to tax the bad, or the excessive, use of a vehicle—excessive in terms either of mileage or of a vehicle's fuel consumption. That matter should not divide the Committee. Given that the Government have pursued a policy of high petrol price increases and taxation, I am surprised that they have not adopted our policy. As I said, I do not believe that Treasury officials have not investigated it as a possible option.

I hope that, while specifically offering the opportunity to compensate those in rural areas who have been penalised by the Government's policy, the amendment will also provide the Minister with an opportunity to explain why he has not accepted such an obvious way of tackling environmental problems without penalising those in rural areas, those on low incomes or those dependent on a car.

Mr. Heathcoat-Amory

The hon. Member says that the amendment is modest because money is tight, but it would cost £242 million a year to implement. As the Liberal Democrats have criticised other Opposition parties for their financial irresponsibility in recent years, I think that it is up to them to apply the same criticism to the amendment. They did not say how else the money was to be raised. As usual, they were extremely good at arguing for tax cuts and public expenditure increases, but that is not a responsible position to adopt.

Another reason why we oppose the amendment is that it would not deliver the desired environmental objectives efficiently. Higher fuel prices have a part to play in reducing harmful emissions because they encourage people to reduce fuel consumption in a variety of ways. They encourage people to purchase smaller cars, drive less and more efficiently, make shorter journeys and switch to other modes of transport, whereas the technique advocated by the hon. Member for Truro (Mr. Taylor) would not cover fuel consumption and would not penalise those who clock up high mileage or allow their vehicle's engine to fall into disrepair. Older cars, even if they are smaller, pollute more than newer cars, which have a larger capacity and are often fitted with catalytic convertors.

The hon. Gentleman got into a bit of a muddle over the effect on the rural motorist. The effect of increasing petrol prices but cutting vehicle excise duties on some cars would not help those in rural areas. It would help those in urban areas who have a low mileage. I refuse to accept not only the hon. Gentleman's amendment but his logic.

One other point—

Mr. Matthew Taylor


Mr. Heathcoat-Amory

I am responding to the hon. Gentleman's speech.

If we were to relieve smaller cars of part of their VED, it would invite manufacturers to reclassify their engines at 1199 cc, which would have very little benefit for the environment and highly distort the automobile market. For all those reasons, I invite my hon. Friends to reject the amendment.

Mr. Taylor

I do not think that the Minister's arguments are terribly coherent. First, manufacturers already have various incentives, mainly because of markets overseas, to classify vehicles under the various capacities and, in this country, under the level of company taxation. Government policy, indeed, even in this country, already anticipitates that. It would be extremely difficult, however, for a company to reclassify a 2 litre, a 2.5 litre, or a 2.8 litre engine as a 1.199 litre engine. Simply, that is not practical.

Although it is true that particulate emissions and various other emissions from older vehicles are relatively high, the main aim of Government policy, as I understand it, is to reduce global warming gases, especially the emission of carbon dioxide. Whichever fuel is burned, carbon dioxide is burnt off and carbon dioxide levels are directly related to the amount of fuel used. Vehicles with smaller engines use less fuel.

Mr. Ian Bruce (South Dorset)

That is not true.

Mr. Taylor

It is a fact. It is also a fact that, because people are relatively affluent and can afford faster and more powerful vehicles, the fuel-efficiency savings available with modern, small-engined vehicles have been used up in achieving higher acceleration rates and higher power rather than higher fuel efficiency. Vehicles bought in the 1950s and 1960s, when petrol prices were relatively high, had 650 cc, 850 cc and 1 litre engines, whereas now they have 1.3 litre, 1.4 litre and 1.5 litre engines. There are no disincentives to buying larger-engined vehicles. We see a clear trend in—

Mr. Ian Bruce


Mr. Taylor

I shall give way in just a moment.

The Minister argued that there was no advantage for rural motorists. The figures that I quoted came from the Automobile Association. The average rural motorist does 9,000 miles a year. The poorer rural motorist does an average of 7,000 miles a year. They are not the high-mileage drivers; they are beneficiaries of the policies that we advocate. The amendment is directly beneficial to them.

Even if we took the more extreme examples of policy that I gave earlier, rural motorists would benefit; indeed, all motorists in smaller cars would benefit up to 20,000 miles a year. That is a simple fact. I do not understand why the Government have not followed that path. It seems popular, effective in tackling environmental problems and far fairer than the policies that the Government have pursued. The only assumption to make is that the Government's proposals are a fund-raising measure rather than one to tackle the environment—in which case, the Minister should be more blunt in saying so, rather than dressing up the proposal in green language.

Mr. Bruce

I wanted to intervene only on the basis that the hon. Gentleman was making an assumption that vehicle manufacturers had increased engine sizes, as they did in many smaller cars, which made them more expensive to run. In fact, the very opposite happened. Many vehicles that have a larger engine for the same weight of vehicle use less fuel. One cannot assume that the size of the engine means that it uses more fuel. Often, the opposite is true.

Mr. Taylor

The hon. Gentleman is talking nonsense. The only people who benefit in financial terms from larger-engined vehicles, as far as I know, are Members of Parliament. In the real world, people know that, broadly speaking, smaller-engined vehicles burn less fuel. That is a simple fact. To understand my point, the hon. Member for South Dorset (Mr. Bruce) need only consider the fuel efficiency statistics and the rated fuel bands, as we did in working out this policy using figures from the Automobile Association and the Royal Automobile Club and from motor manufacturers. If, at some stage, he loses his job in this place and decides to sell cars in a garage, if he argues with the customers who walk through the door that the bigger the engine size, the less fuel the car will use, he may experience a reaction similar to the one that he may receive at the next general election.

Question put, That the amendment be made:—

The Committee divided: Ayes 246, Noes 277.

Division No. 57 9.55 pm
Abbott, Ms Diane Ashdown, Rt Hon Paddy
Adams, Mrs Irene Ashton, Joe
Ainger, Nick Austin-Walker, John
Ainsworth, Robert (Cov'try NE) Banks, Tony (Newham NW)
Allen, Graham Barnes, Harry
Alton, David Battle, John
Anderson, Donald (Swansea E) Bayley, Hugh
Anderson, Ms Janet (Ros'dale) Beckett, Rt Hon Margaret
Armstrong, Hilary Beith, Rt Hon A J
Bell, Stuart Grocott, Bruce
Benn, Rt Hon Tony Gunnell, John
Benton, Joe Hall, Mike
Bermingham, Gerald Hanson, David
Berry, Roger Harman, MS Harriet
Blunkett, David Harvey, Nick
Boateng, Paul Heppell, John
Boyes, Roland Hill, Keith (Streatham)
Bradley, Keith Hinchliffe, David
Bray, Dr Jeremy Hodge, Margaret
Brown, Gordon (Dunfermline E) Hoey.Kate
Brown, N (N'c'tle upon Tyne E) Home Robertson, John
Bruce, Malcolm (Gordon) Hoon, Geoffrey
Burden, Richard Howells, Dr. Kim (Pontypridd)
Byers, Stephen Hoyle, Doug
Caborn, Richard Hughes, Kevin (Doncaster N)
Callaghan.Jim Hughes, Robert (Aberdeen N)
Campbell, Mrs Anne (C'bridge) Hutton,John
Campbell, Menzies (Fife NE) Illsley, Eric
Campbell, Ronnie (Blyth V) Ingram, Adam
Campbell-Savours, D N Jackson, Glenda (H'stead)
Canavan, Dennis Jackson, Helen (Shef'ld, H)
Cann, Jamie Jamieson, David
Chidgey, David Jones, Barry (Alyn and D'side)
Chisholm, Malcolm Jones, Jon Owen (Cardiff C)
Church, Judith Jones, Lynne (B'ham S O)
Clapham, Michael Jones, Martyn (Clwyd, SW)
Clark, Dr David (South Shields) Jones, Nigel (Cheltenham)
Clarke, Eric (Midlothian) Jowell, Tessa
Clarke, Tom (Monklands W) Kaufman, Rt Hon Gerald
Clelland, David Keen, Alan
Clwyd, Mrs Ann Kennedy, Charles (Ross,C&S)
Coffey, Ann Kennedy, Jane (Lpool Brdgn)
Cohen, Harry Khabra, Piare S
Connarty, Michael Kilfoyle, Peter
Cook, Robin (Livingston) Kirkwood, Archy
Corbett, Robin Lestor, Joan (Eccles)
Corbyn, Jeremy Lewis, Terry
Cousins, Jim Liddell, Mrs Helen
Cunningham, Jim (Covy SE) Livingstone, Ken
Dalyell, Tam Lloyd, Tony (Stretford)
Darling, Alistair Llwyd,Elfyn
Davidson, Ian Loyden, Eddie
Davies, Bryan (Oldham C'tral) Lynne, Ms Liz
Davies, Rt Hon Denzil (Llanelli) McAllion, John
Denham, John McAvoy, Thomas
Dixon, Don McCartney, Ian
Dobson, Frank McCrea, The Reverend William
Donohoe, Brian H Macdonald, Calum
Dowd, Jim McKelvey, William
Dunwoody, Mrs Gwyneth Mackinlay, Andrew
Eagle, Ms Angela Maclennan, Robert
Eastham, Ken MacShane, Denis
Enright, Derek Madden, Max
Etherington, Bill Maddock, Diana
Evans, John (St Helens N) Mahon,Alice
Ewing, Mrs Margaret Marek, Dr John
Field, Frank (Birkenhead) Marshall, David (Shettleston)
Fisher, Mark Martin, Michael J (Springburn)
Flynn, Paul Martlew.Eric
Foster, Rt Hon Derek Maxton, John
Foulkes, George Meacher, Michael
Fyfe, Maria Meale, Alan
Galbraith, Sam Michael, Alun
Galloway, George Michie, Bill (Sheffield Heeley)
Gapes, Mike Michie, Mrs Ray (Argyll & Bute)
George, Bruce Milburn,Alan
Gerrard, Neil Miller, Andrew
Gilbert, Rt Hon Dr John Mitchell, Austin (Gt Grimsby)
Godman, Dr Norman A Molyneaux, Rt Hon James
Godsiff, Roger Moonie.Dr Lewis
Golding, Mrs Llin Morgan, Rhodri
Gordon, Mildred Morley, Elliot
Graham, Thomas Morris, Rt Hon Alfred (Wy'nshawe)
Grant, Bernie (Tottenham) Morris, Estelle (B'ham Yardley)
Griffiths, Nigel (Edinburgh S) Morris, Rt Hon John (Aberavon)
Mudie, George Shore, Rt Hon Peter
Mullin, Chris Short, Clare
Oakes, Rt Hon Gordon Skinner, Dennis
O'Brien, William (Normanton) Smith, Andrew (Oxford E)
O'Hara, Edward Smith, Chris (Isl'ton S & F'sbury)
Olner, Bill Smith, Llew (Blaenau Gwent)
O'Neill, Martin Snape, Peter
Orme, Rt Hon Stanley Soley, Clive
Paisley, The Reverend Ian Spearing, Nigel
Parry, Robert Spellar, John
Patchett, Terry Squire, Rachel (Dunfermline W)
Pearson, Ian Steel, Rt Hon Sir David
Pendry, Tom Steinberg, Gerry
Pickthall, Colin Stevenson, George
Pike, Peter L Strang, Dr. Gavin
Pope, Greg Straw, Jack
Powell, Ray (Ogmore) Sutcliffe, Gerry
Prentice, Bridget (Lew'm E) Taylor, Rt Hon John D (Strgfd)
Prentice, Gordon (Pendle) Taylor, Matthew (Truro)
Prescott, Rt Hon John Timms, Stephen
Primarolo, Dawn Tipping, Paddy
Purchase, Ken Turner, Dennis
Quin, Ms Joyce Vaz, Keith
Radice, Giles Walker, Rt Hon Sir Harold
Randall, Stuart Wallace, James
Raynsford, Nick Wardell, Gareth (Gower)
Reid, Dr John Wareing, Robert N
Rendel, David Watson, Mike
Robertson, George (Hamilton) Wicks, Malcolm
Robinson, Geoffrey (Co'try NW) Wigley, Dafydd
Roche, Mrs Barbara Williams, Rt Hon Alan (Sw'n W)
Rogers, Allan Williams, Alan W (Carmarthen)
Rooker, Jeff Wilson, Brian
Rooney, Terry Wise, Audrey
Ross, Ernie (Dundee W) Worthington, Tony
Ross, William (E Londonderry) Wright, Dr Tony
Ruddock, Joan
Salmond.Alex Tellers for the Ayes:
Sedgemore, Brian Mr. Simon Hughes and
Sheldon, Rt Hon Robert Mr. Don Foster
Ainsworth, Peter (East Surrey) Budgen, Nicholas
Aitken, Rt Hon Jonathan Burns, Simon
Alison, Rt Hon Michael (Selby) Butcher, John
Amess, David Butler, Peter
Ancram, Michael Butterfill, John
Arbuthnot James Carlisle, John (Luton North)
Arnold, Jacques (Gravesham) Carlisle, Sir Kenneth (Lincoln)
Arnold, Sir Thomas (Hazel Grv) Carrington, Matthew
Ashby, David Carttiss, Michael
Atkins, Robert Cash, William
Atkinson, Peter (Hexham) Channon, Rt Hon Paul
Baker, Nicholas (North Dorset) Churchill, Mr
Baldry, Tony Clappison, James
Banks, Matthew (Southport) Clark, Dr Michael (Rochford)
Banks, Robert (Harrogate) Clarke, Rt Hon Kenneth (Ru'clif)
Batiste, Spencer Clifton-Brown, Geoffrey
Bellingham, Henry Congdon, David
Bendall, Vivian Conway, Derek
Beresford, Sir Paul Coombs, Anthony (Wyre Fo'st)
Biffen, Rt Hon John Coombs, Simon (Swindon)
Booth, Hartley Cope, Rt Hon Sir John
Boswell, Tim Cormack, Sir Patrick
Bottomley, Peter (Eltham) Couchman, James
Bottomley, Rt Hon Virginia Cran, James
Bowden, Sir Andrew Currie, Mrs Edwina (S D'by'ire)
Bowis, John Curry, David (Skipton & Ripon)
Boyson, Rt Hon Sir Rhodes Davies, Quentin (Stamford)
Brandreth, Gyles Day, Stephen
Brazier, Julian Delvin, Tim
Bright, Sir Graham Dicks, Terry
Brooke, Rt Hon Peter Dorrell, Rt Hon Stephen
Brown, M (Brigg & Cl'thorpes) Douglas-Hamilton, Lord James
Browning, Mrs Angela Dover, Den
Bruce, Ian (Dorset) Duncan, Alan
Duncan Smith, Iain Knight, Gregg (Derby N)
Dunn, Bob Knox, Sir David
Dykes, Hugh Kynoch, George (Kincardine)
Elletson, Harold Lait, Mrs Jacqui
Emery, Rt Hon Sir Peter Lang, Rt Hon Ian
Evans, David (Welwyn Hatfield) Lawrence, Sir Ivan
Evans, Jonathan (Brecon) Legg, Barry
Evans, Nigel (Ribble Hatfield) Leigh, Edward
Evans, Roger (Monmouth) Lennox-Boyd, Sir Mark
Evennett, David Lester, Jim (Broxtowe)
Faber, David Lidington, David
Fabricant Michael Lightbown, David
Field, Barry (Isle of Wight) Lilley, Rt Hon Peter
Fishburn, Dudley Lloyd, Rt Hon Sir Peter (Fareham)
Forman, Nigel Lord.Michael
Forsyth, Rt Hon Michael (Stirling) Luff, Peter
Forth, Eric Lyell, Rt Hon Sir Nicholas
Fowler, Rt Hon Sir Norman MacGregor, Rt Hon John
Fox, Dr Liam (Woodspring) MacKay, Andrew
Fox, Sir Marcus (Shipley) Maclean, David
Freeman, Rt Hon Roger McLoughlin, Patrick
French, Douglas McNair-Wilson, Sir Patrick
Gallie, Roger Maitland, Lady Olga
Gallie, Phil Malone, Gerald
Gardiner, Sir George Mans, Keith
Garnier, Edward Marland, Paul
Gill, Christopher Marshall, John (Hendon S)
Gillan, Cheryl Marshall, Sir Michael (Arundel)
Goodson-Wickes, Dr Charles Martin, David (Portsmouth S)
Gorman, Mrs Teresa Mates, Michael
Gorst Sir John Mellor, Rt Hon David
Grant, Sir A (SW Cambs) Merchant, Piers
Greenway, Harry (Ealing N) Mills, Iain
Greenway, John (Ryedale) Mitchell, Andrew (Gedling)
Griffiths, Peter (Portsmouth, N) Mitchell, Sir David (NW Hants)
Grylls, Sir Michael Moate, Sir Roger
Hague, William Monro, Sir Hector
Hamilton, Neil (Tatton) Montgomery, Sir Fergus
Hampson.Dr Keith Moss, Malcolm
Hanley, Rt Hon Jeremy Needham, Rt Hon Richard
Hannam, Sir John Nelson, Anthony
Hargreaves, Andrew Neubert, Sir Michael
Harris, David Newton, Rt Hon Tony
Haselhurst, Alan Nicholls, Patrick
Hawkins, Nick Nicholson, David (Taunton)
Hawksley, Warren Nicholson, Emma (Devon West)
Hayes, Jerry Norris, Steve
Heald,Oliver Onslow, Rt Hon Sir Cranley
Heath, Rt Hon Sir Edward Oppenheim, Phillip
Heathcoat-Amory, David Page, Richard
Hendry, Charles Paice, James
Higgins, Rt Hon Sir Terence Patten, Rt Hon John
Hill, James (Southampton Test) Pattie, Rt Hon Sir Geoffrey
Hogg, Rt Hon Douglas (G'tham) Peacock, Mrs Elzabeth
Horam, John Pickles, Eric
Hordem, Rt Hon Sir Peter Porter, Barry (Wirral S)
Howard, Rt Hon Michael Porter, David (Waveney)
Howarth, Alan (Strat'rd-on-A) Portillo, Rt Hon Michael
Howell, Rt Hon David (G'dford) Powell, William (Corby)
Hughes, Robert G (Harrow W) Redwood, Rt Hon John
Hurt, Rt Hon David (Wirral W) Richards, Rod
Hunter, Andrew Riddick, Graham
Hurd, Rt Hon Douglas Robathan, Andrew
Jack, Michael Roberts, Rt Hon Sir Wyn
Jackson, Robert (Wantage) Robertson, Raymond (Ab'd'n S)
Jenkin, Bernard Robinson, Mark (Somerton)
Jessel,Toby Roe, Mrs Marion (Broxbourne)
Jones, Gwilym (Cardiff N) Rowe, Andrew (Mid Kent)
Jones, Robert B (W Hertfdshr) Rumbold, Rt Hon Dame Angela
Kellett-Bowman, Dame Elaine Ryder, Rt Hon Richard
Key, Robert Sackville.Tom
Kiffedder, Sir James Sainsbury, Rt Hon Sir Timothy
King, Rt Hon Tom Scott, Rt Hon Sir Nicholas
Kirkhope, Timothy Shaw, David (Dover)
Knapman, Roger Shaw, Sir Giles (Pudsey)
Knight, Mrs Angela (Erewash) Shephard, Rt Hon Gillian
Shepherd, Colin (Hereford) Townsend, Cyril D (Bexl'yh'th)
Shersby, Michael Tracey, Richard
Sims, Roger Tredinnick, David
Skeet, Sir Trevor Trend, Michael
Smith, Tim (Beaconsfield) Twinn, Dr Ian
Soames, Nicholas Vaughan, Sir Gerard
Spencer, Sir Derek Viggers, Peter
Spicer, Sir James (W Dorset) Waldegrave, Rt Hon William
Spicer, Michael (S Worcs) Walden, George
Spink Dr Robert Walker.Bill (N Tayside)
Spring, Richard Waller, Gary
Sproat Iain Ward, John
Squire, Robin (Hornchurch) Wardle, Charles (Bexhill)
Stanley, Rt Hon Sir John Wateraon, Nigel
Steen, Anthony Watts, John
Stephen, Michael Wells,Bowen
Stern, Michael Whitney, Ray
Stewart, Allan Whittingdale, John
Streeter, Gary Widdecombe, Ann
Sumberg, David Wiggin, Sir Jerry
Sweeney, Walter Willetts, David
Sykes, John Wilshire, David
Tapsell, Sir Peter Winterton, Mrs Ann (Congleton)
Taylor, Ian (Esher) Wolfson, Mark
Taylor, John M (Solihull) Wood, Timothy
Temple-Morris, Peter Yeo,Tim
Thompson, Roy Young, Rt Hon Sir George
Thompson, Patrick (Norwich N) Tellers for the Noes:
Thornton, Sir Malcolm Mr. Sidney Chapman and
Thurnham, Peter Mr. Michael Bates

Question accordingly negatived.

Amendments made: No. 42, in page 168, line 14, leave out 'or forestry' and insert ',forestry or activities falling within sub-paragraph (2A). (2A) The activities falling within this sub-paragraph are—

  1. (a) cutting verges bordering public roads;
  2. (b) cutting hedges or trees bordering public roads or bordering verges which border public roads.'.

No. 43, in page 168, line 22, at end insert— '413B.—(1) A vehicle is a special concessionary vehicle if it is a light agricultural vehicle. (2) In sub-paragraph (1) "light agricultural vehicle" means a vehicle which—

  1. (a) has a revenue weight not exceeding 1,000 kilograms,
  2. (b) is designed and constructed so as to seat only the driver,
  3. (c) is designed and constructed primarily for use otherwise than on roads, and
  4. (d) is used solely for purposes relating to agriculture, horticulture or forestry.'.—[Dr. Fox.]

Ms Primarolo

I beg to move amendment No. 33, in page 168, line 22, at end insert— `4BA. A vehicle is a special concessionary vehicle if it is constructed or adapted to be used primarily for towing a disabled vehicle in such a manner (whether or not involving superimposition) as to cause a substantial part of the weight of the disabled vehicles to be borne by the vehicle in question.'.

The First Deputy Chairman of Ways and Means (Dame Janet Fookes)

With this, it will be convenient to discuss also the following: Amendment No. 30, in page 168, leave out lines 42 and 43.

Government amendments Nos. 44 to 47.

Ms Primarolo

I do not wish unduly to detain the House. These are important matters which we discussed earlier this evening. The amendment seeks to delete the new proposals which the Government have introduced in vehicle excise duty for road recovery vehicles and to maintain the status quo. These specialised vehicles are restricted by law as to the work which they can carry out, so the points made by the Minister earlier about multiple use do not apply.

The amendment is particularly important because the majority of those vehicles are partial-lift vehicles which are not used extensively, and for long periods are waiting for calls and emergency requests from the police. The Minister told us that he needed to deal with anomalies, but, as this evening has demonstrated, he is creating more than he is closing. The Minister told us that the measures will bring in only another 1 per cent. of extra revenue to the Government, an amount they could easily forgo pending the important review of services. It is a commonsense answer to a practical set of problems and it totally beggars belief that the Government are prepared to make every concession possible to farmers, to keep their Back Benchers and the farming industry happy, yet they will not take vital steps to safeguard public safety and safety on our roads. The costs are minimal, but the principle is important.

The Government have failed to respond to those arguments. While providing some concessions, their amendments do not go far enough. Some companies will still be adversely affected and a decline in the service will follow. We intend, therefore, to press our amendments to the vote at the conclusion of this brief debate.

Mr. Edward O'Hara (Knowsley, South)

Unlike the lighter vehicles used to recover cars and roadside rescue vehicles, heavy recovery vehicles are highly specialised, as my hon. Friend the Member for Bristol, South (Ms Primarolo) pointed out. They are used to recover fully laden heavy goods vehicles and have a very low annual mileage. There are few jobs over which to spread the costs. They represent a long-term investment, with a long-term payback period and an annual income per vehicle that is extremely sensitive to the cost of overheads.

As my hon. Friend the Member for Bristol, South said, the Government amendment makes some concessions, but operators will still have to pay a nine or 10-fold increase in excise duty from the present standard £85, instead of the proposed fiftyfold increase. That will force some operators out of business and lead others to opt out of heavy vehicle recovery, which could mean that many parts of the country will end up with only a limited capacity for removing broken-down or accident-damaged vehicles. That will lead to longer delays in clearing roads and poses questions for public safety.

The proposals should be put aside, pending a review of the implications, and the standard flat rate should be retained meanwhile. Otherwise, heavy recovery vehicles will simply not be available to assist at emergencies when required.

I am thinking of a heavy vehicle recovery operation in my constituency adjacent to my home. It is at the junction of the M57 and M62 motorways. The junction of the M57 and M58 is 10 miles up the road, as well as access.to the container depot at Liverpool docks. Believe it or not, just as much tonnage goes through the docks as it did in Liverpool's heyday, but nowadays it is in containers on heavily laden vehicles. The bottleneck of the Runcorn suspension bridge is 10 miles further away, leading to the heavy chemical industrial area of Runcorn and onwards, via the M56, to the bottleneck access to north Wales. The junction of the M62 with the M6 and the notorious Thelwall viaduct are 15 miles away and the junction with the notorious M61 and M63 is about 10 miles further away, in Greater Manchester.

The Government should take away their recommendation, or, when emergencies happen, no heavy recovery vehicles will be available for specialised roadside rescue, there will be inordinate delays and possibly life-threatening accidents.

10.15 pm
Mr. Heathcoat-Amory

I do not know whether the hon. Member for Knowsley, South (Mr. O'Hara) was here earlier today when we debated those matters extensively, but I made it clear then that the Government's amendments meet the concerns that he raises.

The heavier recovery vehicles will now be taxed at a much more favourable rate than if they were heavy goods vehicles. For instance, middle-weight recovery vehicles will pay only £450 duty and very heavy vehicles that may be used only occasionally will pay £750, compared with up to £5,000 a year for heavy goods vehicles.

The trade says that it is satisfied with that structure. The Retail Motor Industry Federation, which is important because it includes recovery vehicle operators, has written to me saying that it is satisfied with the proposals. If we have satisfied the trade, we should have satisfied the Committee.

Question put, That the amendment be made:—

The Committee divided: Ayes 245, Noes 275.

Division No. 58 10.15 pm
Abbott, Ms Diane Byers, Stephen
Adams, Mrs Irene Caborn, Richard
Ainger, Nick Callaghan,Jim
Ainsworth, Robert (Cov'try NE) Campbell, Mrs Anne (C'bridge)
Allen, Graham Campbell, Menzies (Fife NE)
Alton, David Campbell, Ronnie (Blyth V)
Anderson, Donald (Swansea E) Campbell-Savours, D N
Anderson, Ms Janet (Ros'dale) Canavan, Dennis
Armstrong, Hilary Cann, Jamie
Ashdown, Rt Hon Paddy Chidgey, David
Ashton, Joe Chisholm, Malcolm
Austin-Walker, John Church, Judith
Banks, Tony (Newham NW) Clapham, Michael
Barnes, Harry Clark, Dr David (South Shields)
Battle, John Clarke, Eric (Midlothian)
Bayley, Hugh Clarke, Tom (Monklands W)
Beckett, Rt Hon Margaret Clelland, David
Beith, Rt Hon A J Clwyd, Mrs Ann
Bell, Stuart Coffey, Ann
Benn, Rt Hon Tony Cohen, Harry
Benton, Joe Connarty, Michael
Bermingham, Gerald Cook, Robin (Livingston)
Berry, Roger Corbett, Robin
Blunkett, David Corbyn, Jeremy
Boateng, Paul Cousins, Jim
Boyes, Roland Cunningham, Jim (Covy SE)
Bradley, Keith Dalyell, Tam
Bray, Dr Jeremy Darling, Alistair
Brown, Gordon (Dunfermline E) Davidson, Ian
Brown, Nicholas Davies, Bryan (Oldham C'tral)
Bruce, Malcolm (Gordon) Davies, Rt Hon Denzil (Llanelli)
Burden, Richard Denham, John
Dixon,Don McAvoy, Thomas
Dobson, Frank McCartney, Ian
Donohoe, Brian H McCrea, The Reverend William
Dowd, Jim Macdonald, Calum
Dunwoody, Mrs Gwyneth McKelvey.William
Eagle, Ms Angela Mackinlay, Andrew
Eastham, Ken Maclennan, Robert
Enright, Derek MacShane, Denis
Etherington, Bill Madden, Max
Evans, John (St Helens N) Maddock, Diana
Ewing, Mrs Margaret Mahon, Alice
Field, Frank (Birkenhead) Marek, Dr John
Fisher, Mark Marshall, David (Shettleston)
Flynn, Paul Martin, Michael J (Springburn)
Foster, Rt Hon Derek Martlew, Eric
Foster, Don (Bath) Maxton, John
Foulkes, George Meacher, Michael
Fyfe, Maria Meale, Alan
Galbraith, Sam Michael, Alun
Galloway, George Michie, Bill (Sheffield Heeley)
Gapes, Mike Michie, Mrs Ray (Argyll & Bute)
George, Bruce Milburn, Alan
Gerrard, Neil Miller, Andrew
Gilbert, Rt Hon Dr John Mitchell, Austin (Gt Grimsby)
Godman, Dr Norman A Molyneaux, Rt Hon James
Godsiff, Roger Moonie, Dr Lewis
Golding, Mrs Llin Morgan, Rhodri
Gordon, Mildred Morley, Elliot
Graham, Thomas Morris, Rt Hon Alfred (Wy'nshawe)
Grant, Bernie (Tottenham) Morris, Rt Hon John (Aberavon)
Griffiths, Nigel (Edinburgh S) Mudie, George
Grocott, Bruce Mullin, Chris
Gunnell, John Oakes, Rt Hon Gordon
Hall, Mike O'Brien, William (Normanton)
Hanson, David O'Hara, Edward
Harman, Ms Harriet Olner, Bill
Harvey, Nick O'Neill, Martin
Heppell, John Orme, Rt Hon Stanley
Hill, Keith (Streatham) Paisley, The Reverend Ian
Hinchliffe, David Parry, Robert
Hodge, Margaret Patchett, Terry
Hoey, Kate Pearson, Ian
Home Robertson, John Pendry, Tom
Hoon, Geoffrey Pickthall, Colin
Howells, Dr. Kim (Pontypridd) Pike, Peter L
Hoyle, Doug Pope, Greg
Hughes, Kevin (Doncaster N) Powell, Ray (Ogmore)
Hughes, Robert (Aberdeen N) Prentice, Bridget (Lew'm E)
Hughes, Simon (Southwark) Prentice, Gordon (Pendle)
Hutton, John Prescott, Rt Hon John
Illsley, Eric Primarolo, Dawn
Ingram, Adam Purchase, Ken
Jackson, Glenda (H'stead) Quin, Ms Joyce
Jackson, Helen (Shef'ld, H) Radice, Giles
Jamieson, David Randall, Stuart
Jones, Barry (Alyn and D'side) Rathbone, Tim
Jones, Jon Owen (Cardiff C) Raynsford, Nick
Jones, Lynne (B'ham S O) Reid, Dr John
Jones, Martyn (Clwyd, SW) Rendel, David
Jones, Nigel (Cheltenham) Robertson, George (Hamilton)
Kaufman, Rt Hon Gerald Robinson, Geoffrey (Co'try NW)
Keen, Alan Roche, Mrs Barbara
Kennedy, Charles (Ross, C&S) Rogers, Allan
Kennedy, Jane (Lpool Brdgn) Rooker, Jeff
Khabra, Piara S Rooney, Terry
Kifoyle, Peter Ross, Ernie (Dundee W)
Kirkwood, Archy Ross, William (E Londonderry)
Lestor, Joan (Eccles) Ruddock, Joan
Lewis, Terry Salmond, Alex
Liddell, Mrs Helen Sedgemore, Brian
Livingstone, Ken Sheldon, Rt Hon Robert
Lloyd, Tony (Stretford) Shore, Rt Hon Peter
Llwyd, Elfyn Short, Clare
Loyden, Eddie Skinner, Dennis
Lynne, Ms Liz Smith, Andrew (Oxford E)
McAllion, John Smith, Chris (Isl'ton S & F'sbury)
Smith, Llew (Blaenau Gwent) Vaz, Keith
Snape, Peter Walker, Rt Hon Sir Harold
Soley, Clive Wardell, Gareth (Gomer)
Spearing, Nigel Wareing, Robert N
Spellar, John Watson, Mike
Squire, Rachel (Dunfermline W) Wicks, Malcolm
Steel, Rt Hon Sir David Wigley, Dafydd
Steinberg, Gerry Williams, Rt Hon Alan (Sw'n W)
Stevenson, George Williams, Alan W (Carmarthen)
Strang, Dr. Gavin Wilson, Brian
Straw, Jack Wise, Audrey
Sutcliffle, Gerry Worthington, Tony
Taylor, Rt Hon John D (Strgfd) Wright, Dr Tony
Taylor, Matthew (Truro)
Timms, Stephen Tellers for the Ayes:
Tipping, Paddy Mrs. Estelle Morris and
Turner, Dennis Ms Tessa Jowell
Ainsworth, Peter (East Surrey) Cope, Rt Hon Sir John
Aitken, Rt Hon Jonathan Cormack, Sir Patrick
Alison, Rt Hon Michael (Selby) Couchman, James
Amess, David Cran, James
Ancram, Michael Currie, Mrs Edwina (S D'by'ire)
Arbuthnot, James Curry, David (Skipton & Ripon)
Arnold, Jacques (Gravesham) Davies, Quentin (Stamford)
Arnold, Sir Thomas (Hazel Grv) Day, Stephen
Ashby, David Delvin,Tim
Atkins, Robert Dicks, Terry
Atkinson, Peter (Hexham) Dorrell, Rt Hon Stephen
Baker, Nicholas (North Dorset) Douglas-Hamilton, Lord James
Baldry, Tony Dover, Den
Banks, Matthew (Southport) Duncan, Alan
Banks, Robert (Harrogate) Duncan Smith, Iain
Batiste, Spencer Dunn, Bob
Bellingham, Henry Dykes, Hugh
Bendall, Vivian Elletson, Harold
Beresford, Sir Paul Emery, Rt Hon Sir Peter
Biffen, Rt Hon John Evans, David (Welwyn Hatfield)
Booth, Hartley Evans, Jonathan (Brecon)
Boswell,Tim Evans, Nigel (Ribble Valley)
Bottomley, Peter (Eltham) Evans, Roger (Monmouth)
Bottomley, Rt Hon Virginia Evennett, David
Bowden, Sir Andrew Faber, David
Bowis, John Fabricant, Michael
Boyson, Rt Hon Sir Rhodes Field, Barry (Isle of Wight)
Brandreth, Gyles Fishburn, Dudley
Brazier, Julian Forman, Nigel
Bright Sir Graham Forsyth, Rt Hon Michael (Stirling)
Brooke, Rt Hon Peter Forth, Eric
Brown, M (Brigg & Cl'thorpes) Fowler, Rt Hon Sir Norman
Browning, Mrs Angela Fox, Dr Liam (Woodspring)
Bruce, Ian (Dorset) Fox, Sir Marcus (Shipley)
Budgen, Nicholas Freeman, Rt Hon Roger
Burt, Alistair French, Douglas
Butcher, John Gale, Roger
Butler, Peter Gallie, Phil
Butterfill, John Gardiner, Sir George
Carlisle, John (Luton North) Garnier, Edward
Carlisle, Sir Kenneth (Lincoln) Gill, Christopher
Carrington, Matthew Gillan, Cheryl
Carttiss, Michael Goodson-Wickes, Dr Charles
Cash, William Gorman, Mrs Teresa
Channon, Rt Hon Paul Gorst, Sir John
Chapman, Sydney Grant, Sir A (SW Cambs)
Churchill, Mr Greenway, Harry (Ealing N)
Clappison, James Greenway, John (Ryedale)
Clark, Dr Michael (Rochford) Griffiths, Peter (Portsmouth, N)
Clarke, Rt Hon Kenneth (Ru'clif) Grylls, Sir Michael
Clifton-Brown, Geoffrey Hague, William
Congdon, David Hampson, Dr Keith
Conway, Derek Hanley, Rt Hon Jeremy
Coombs, Anthony (Wyre For'st) Hannam, Sir John
Coombs, Simon (Swindon) Hargreaves, Andrew
Harris, David Newton, Rt Hon Tony
Haselhurst,Alan Nicholls, Patrick
Hawkins, Nick Nicholson, David (Taunton)
Hawksley, Warren Nicholson, Emma (Devon West)
Hayes, Jerry Norris, Steve
Heald,Oliver Onslow, Rt Hon Sir Cranley
Heath, Rt Hon Sir Edward Oppenheim, Phillip
Heathcoat-Amory, David Page, Richard
Hendry, Charles Paice, James
Hicks, Robert Patten, Rt Hon John
Higgins, Rt Hon Sir Terence Pattie.Rt Hon Sir Geoffrey
Hill, James (Southampton Test) Peacock, Mrs Elizabeth
Hogg, Rt Hon Douglas (G'tham) Pickles, Eric
Horam, John Porter, Barry (Wirral S)
Hordern, Rt Hon Sir Peter Porter, David (Waveney)
Howard, Rt Hon Michael Portillo, Rt Hon Michael
Howarth, Alan (Strat'rd-on-A) Powell, William (Corby)
Howell, Rt Hon David (G'dford) Redwood, Rt Hon John
Hughes, Robert G (Harrow W) Richards, Rod
Hunt, Rt Hon David (Wrral W) Riddck, Graham
Hunter, Andrew Robathan, Andrew
Hurd, Rt Hon Douglas Roberts, Rt Hon Sir Wyn
Jack, Michael Robertson, Raymond (Ab'd'n S)
Jackson, Robert (Wantage) Robinson, Mark (Somerten)
Jenkin, Bernard Roe, Mrs Marion (Broxbourne)
Jessel, Toby Rowe, Andrew (Mid Kent)
Jones, Gwilym (Cardiff N) Rumbold, Rt Hon Dame Angela
Jones, Robert B (W Hertfdshr) Ryder, Rt Hon Richard
Kellett-Bowman, Dame Elaine Sackville,Tom
Key, Robert Sainsbury, Rt Hon Sir Timothy
Kilfedder, Sir James Scott, Rt Hon Sir Nicholas
King, Rt Hon Tom Shaw, David (Dover)
Kirkhope, Timothy Shaw, Sir Giles (Pudsey)
Knapman, Roger Shephard, Rt Hon Gillian
Knight, Mrs Angela (Erewash) Shepherd, Colin (Hereford)
Knight, Greg (Derby N) Shersby, Michael
Knox, Sir David Sims, Roger
Kynoch, George (Kincardine) Skeet, Sir Trevor
Lait, Mrs Jacqui Smith, Tim (Beaconsfield)
Lang, Rt Hon Ian Soames, Nicholas
Lawrence, Sir Ivan Spencer, Sir Derek
Legg, Barry Spicer, Sir James (W Dorset)
Leigh, Edward Spicer, Michael (S Worcs)
Lennox-Boyd, Sir Mark Spink,Dr Robert
Lester, Jim (Broxtowe) Spring, Richard
Lidington, David Sproat, Iain
Lightbown, David Squire, Robin (Hornchurch)
Lilley, Rt Hon Peter Stanley, Rt Hon Sir John
Lloyd, Rt Hon Sir Peter (Fareham) Steen, Anthony
Lord, Michael Stephen, Michael
Luff, Peter Stern, Michael
Lyell, Rt Hon Sir Nicholas Stewart, Allan
MacGregor, Rt Hon John Streeter, Gary
MacKay, Andrew Sumberg, David
Maclean, David Sweeney, Walter
McLoughlin, Patrick Sykes,John
McNair-Wilson, Sir Patrick Tapsell, Sir Peter
Maitland, Lady Olga Taylor, Ian (Esher)
Malone, Gerald Taylor, John M(Solihull)
Mans, Keith Temple-Morris, Peter
Marland, Paul Thomason, Roy
Marshall, Sir Michael (Arundel) Thompson, Patrick (Norwich N)
Martin, David (Portsmouth S) Thornton, Sir Malcolm
Mates, Michael Thurnham, Peter
Mellor, Rt Hon David Townsend, Cyril D (Bexl'yh'th)
Merchant, Piers Tracey, Richard
Mills, Iain Tredinnick, David
Mitchell, Andrew (Gedling) Trend, Michael
Mitchell, Sir David (NW Hants) Twinn, Dr Ian
Moate, Sir Roger Vaughan, Sir Gerard
Monro, Sir Hector Viggers, Peter
Montgomery, Sir Fergus Walden, George
Moss, Malcolm Walker,Bill(N Tayside)
Needham, Rt Hon Richard Waller, Gary
Nelson, Anthony Ward, John
Neubert Sir Michael Wardle, Charles (Bexhill)
Waterson, Nigel Wilshire, David
Watts, John Winterton, Mrs Ann (Congleton)
Wells, Bowen Wolfson, Mark
Whitney, Ray Wood, Timothy
Whittingdale, John Yeo,Tim
Widdecombe, Ann Tellers for the Noes:
Wiggin, Sir Jerry Mr. Simon Burns and
Willetts,David Mr. Michael Bates

Question accordingly negatived.

Amendments made: No. 44, in page 168, leave out line 43 and insert— '10.—(1) Paragraph 5 of Schedule 1 to the 1994 Act (recovery vehicles) shall be amended as follows. (2) In sub-paragraph (1)(annual rate of duty of £85) for the words "is £85" there shall be substituted "is—

  1. (a) if it has a revenue weight exceeding 3,500 kilograms and not exceeding 12,000 kilograms, the same as the basic goods vehicle rate;
  2. (b) if it has a revenue weight exceeding 12,000 kilograms and not exceeding 25,000 kilograms, 300 per cent. of the basic goods vehicle rate;
  3. (c) if it has a revenue weight exceeding 25,000 kilograms, 500 per cent. of the basic goods vehicle rate."

(3) The following sub-paragraphs shall be inserted after sub-paragraph (5)— (6) In sub-paragraph (1) references to the basic goods vehicle rate are to the rate applicable, by virtue of sub-paragraph (1) of paragraph 9, to a rigid goods vehicle which falls within column (3) of the table in that sub-paragraph and has a revenue weight exceeding 3,500 kilograms and not exceeding 7,500 kilograms. (7) Where an amount arrived at in accordance with sub-paragraph (1)(b) or (c) is an amount—

  1. (a) which is not a multiple of £10, and
  2. (b) which on division by ten does not produce a remainder of £5,
the rate is the amount arrived at rounded (either up or down) to the nearest amount which is a multiple of £10. (8) Where an amount arrived at in accordance with sub-paragraph (1)(b) or (c) is an amount which on division by ten produces a remainder of £5, the rate is the amount arrived at increased by £5.".'. No. 45, in page 169, line 19, leave out from beginning to end of line 24.

No. 46, in page 172, line 51, leave out from beginning to end of line 6 on page 173.—[Dr. Liam Fox.]

Mrs. Ray. Michie (Argyll and Bute)

I beg to move amendment No. 41, in page 173, line 13, at end insert— `(13A) Notwithstanding the above provisions within this, schedule, the rate of vehicle excise duty for vehicles in the Restricted Heavy Goods Vehicle tax class which are operating primarily within a region in which there has been previous exemption from plating and testing shall be £150 per year.'. This amendment was tabled because I want the Government to think again about the enormous burden that they are about to impose on small businesses and contractors operating on islands off the west and north coasts of Scotland [Interruption.]

The Chairman of Ways and Means (Mr. Michael Morris)

Order. I would be most grateful if hon. Members in the vicinity of the Bar would go further beyond it to continue their discussions.

Mrs. Michie

I make particular mention of the northern islands because my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) shares my concern.

I first raised this matter with the Department of Transport. I am sorry to see that there is no Minister from that Department in the House tonight. Formerly, island-based heavy goods vehicles paid a concessionary rate of £150 a year, because they are exempted from plating and testing. That is because there are no plating or testing stations on the islands.

But the Government now want them to pay according to the manufacturers' plated weight for each vehicle. As a result, island-based hauliers will have to pay between £1,280 and £4,250 a year per vehicle. As well as adding to the islanders' transport costs, that is likely to force many smaller firms out of business, with a consequent reduction in employment on the islands.

A concessionary rate should certainly be retained for the HGVs used only on the islands. The annual mileage is much lower than that of mainland HGVs, and the maximum payload is often limited by road restrictions. For example, a constituent of mine who runs a tanker to refuel fishing boats on the island of Mull does only 500 miles a year, yet he is threatened with an annual vehicle excise duty of £2,160. He will have to pass that on to the fishermen, and they cannot bear that sort of extra burden.

Some lorries never leave the island, and other contractors are based on, and operate from and to, the island. Arguably, a concessionary rate should also apply to HGVs used solely for deliveries to and from the islands, on condition that they do not ply for mainland business between island runs. That is a reasonable suggestion, because ferry timetables effectively impose restrictions on the use of such lorries. Their total annual mileage is less than 50 per cent. of the national average.

One of the busiest lorries on Mull does about 16,000 miles a year, compared with the national average of 47,000.

There is another category of vehicle that will be caught, with devastating consequences for the economy of the islands. They are known as shunt units. One of the main hauliers of goods to the islands in my constituency uses elderly cab units to marshal trailers on board Caledonian MacBrayne ferries and terminals. They are currently exempt from VED, but from 1 July of this year they will have to pay according to the manufacturers' plated weight. That will cost £3,150 per vehicle per year.

Although the contractor has been told that the increase will be phased in, with each vehicle paying £1,000 in the first year, I believe that the concession will last for only one year. Apart from travelling to and from the depot for occasional maintenance, shunt units do not use public roads; so why should they pay vehicle excise duty?

This haulier therefore faces a total extra cost of £15,750, which he will have no option but to pass on to his customers, thus adding to the cost of living on the islands. And he has already had to face increases in the ferry fares.

Mr. William Ross

The hon. Lady makes a powerful case for concessions to lorries that operate on islands—presumably she means islands that do not have a road bridge. Would she extend that same concession to the Isle of Wight? What will happen to Skye and Anglesey?

10.30 pm
Mrs. Michie

The Isle of Wight is quite a wealthy island, and many wealthy tourists go there. I am particularly concerned with the islands off the coast of Scotland, which struggle to survive with their farming and crofting communities. It is they who must be given help—indeed, they are given help in terms of ferry subsidies, so it seems ludicrous that the Government should give subsidies on the one hand and tax them on the other.

I contacted the Department of Transport, which last year started to tell owners of HGVs that it was removing the concessionary rates for road tax on certain islands, and that would mean that island-based operators would be faced with the sums about which I have already spoken. I am sure that the Minister can understand and imagine the shock and dismay.

The Minister responsible, at the time, however, the hon. Member for Salisbury (Mr. Key), responded in a worthwhile manner. He ended his letter by saying—[Interruption.]

The Second Deputy Chairman of Ways and Means (Dame Janet Fookes)

Order. I am sorry to interrupt the hon. Lady, but there is a general hum of conversation. That is not polite to the hon. Member who has the Floor, and I must ask the Committee to be very much quieter so that I can hear, without straining my ears, what the hon. Lady is saying.

Mrs. Michie

Thank you, Dame Janet.

The Minister said: I am afraid that in some cases this will have significant cost implications, particularly for the heavier vehicles. He continued: Because of the effects this might have on hauliers whose vehicles never leave the islands, I have asked my officials to review the position and will write to you in due course to let you know the result of the review. I then had a letter in September 1994 from the Under-Secretary of State at the Department of Transport. He said: the law in this area is not as clear as it might be, and I have therefore decided that we will return to the criteria for qualifying for the basic rate VED for HGV's that applied before last April. In fact, the licensing people in Swansea had already started to increase the licensing fees to the lorry drivers. Fortunately, the Minister interfered; told it to stop and asked it to pay back—indeed it did—the lorry drivers who had paid the cheques that it had requested.

The Under-Secretary of State went on the say—this is important— This is an interim measure while we carry out a review … We are continuing to examine the position of off-shore islands in this wider review, which I expect to be complete in the Autumn. We will of course make sure that we consider the views of all interested parties. Perhaps the Minister can ask the Department of Transport if he does not know the answer. What was the outcome of the review? Whom did the Department of Transport consult?

I wrote again to him on 30 December 1994, but to date have had no reply. Then I found all this being slipped, as it were, into the Finance Bill. If the Government go ahead with these massive increases and penalise the islanders in that way, the consequences for the economy and for the people will be very detrimental, for it will put not just the small contractors out of business—the man with one lorry, which never leaves the island—but people out of jobs. It will increase the cost of living for everyone.

Anyone who had heard tonight's speeches would think that the lorries were operating on mainland trunk roads. I wonder whether the Minister knows whether the roads involved are like: most are single-track, and some islands have only a few miles of roads—if they can be called roads.

Replying to a debate on an earlier amendment, the Minister said that he wanted to give special treatment to those who most needed it—those with a very good case. I believe that the island businesses qualify on both counts. The Minister also said that inevitably there would be winners and losers; I thought from the tone of last year's ministerial letters that the islanders would be winners, but if these measures are passed, their impact will be severe and out of all proportion to the return to the Treasury.

I feel badly let down, and my constituents will feel even more so. They believed what I told them, because I believed the Minister. [Interruption.] Some may say that that was a mistake, but I think that it is a shame. I genuinely believed the Minister, and I was sure that my constituents would understand the problem. On behalf of the islanders, I therefore ask the Ministers involved to reconsider the matter.

Mr. Brian Wilson (Cunninghame, North)

I support the amendment. I must say that it is encouraging—and very unusual—to see such a large demonstration of interest in Hebridean affairs on the Conservative Benches.

As the Minister to whom the hon. Member for Argyll and Bute (Mrs. Michie) has referred is present, I shall pay a small tribute to him. Unfortunately, he is in fact an ex-Minister. The then Minister who wrote to me in similar terms is the hon. Member for Salisbury (Mr. Key).

It was an unusual case, in which there was a specific constituency point for me—and for the hon. Member for Argyll and Bute, my hon. Friend the Member for Western Isles (Mr. Macdonald) and one or two others. We argued a fine intellectual case; we got through to the Minister and his civil servants personally, made the case and defined its peculiarities, and we made progress. We received a very good response from the hon. Member for Salisbury: he was sensitive, he was intelligent and he was sacked. If I may say so, in other contexts what has taken his place is certainly no improvement in terms of the criteria that I have defined.

Fragile island communities are heavily penalised by the current level of ferry charges. In those islands—including islands in my constituency—a concession on VED has historically been granted because its fairness has been recognised. I do not know what goes on in the minds of civil servants on cold grey winter mornings when they feel that they have to take it out on someone; perhaps, on the 6.30 am train from Chipping Norton, they decide that they are going to cancel an anomaly whereby island haulage operators benefit in comparison to others, and that in a vast Finance Bill they will incorporate a clause that, in financial terms, is probably not worth the time that has been devoted to it tonight.

But it is absurd that they should go to such lengths to cancel out a tiny anomaly for the sake of financial gain to the Treasury—an action that will have an entirely disproportionate effect on the small number of communities that we are discussing.

That is the curiosity of it. Of all the matters on which we can legislate and of all the sources of revenue, we adopt the absurd idea of going for a small number of island contractors. That is why I make no apology for detaining the Committee and arguing that case. If Conservative Members intend to vote for such legislation they might as well pay for it by spending a little of their time hearing just how absurd it is.

10.45 pm

There are three categories of island hauliers, and I am sure that hon. Members will be interested to hear each of them described in detail. As the hon. Member for Argyll and Bute said, the first consists of those who have lorries that never leave the island. I know that the hon. Member for Salisbury will confirm that it would be incredible anti totally at odds with the representations and responses for those hauliers to be brought within the ambit of the clause.

There is a clear distinction to be made. The vehicles of those hauliers can travel only within their own island communities. On the island of Barra, which is represented by my hon. Friend the Member for Western Isles there is one circular road. Cumbrae in my constituency is exactly the same, and in terms of road distance, Arran is not much greater. I see someone to whom I am not allowed to refer who is familiar with the island of Coll.

The idea that such hauliers should pay the same taxation for road use as those whose vehicles thunder up and down the M1 and the M6 every day is such a patent absurdity that I hope it impacts upon some Conservative Members. There is a clear distinction to be drawn in terms of vehicles which never leave the islands.

There is also an important distinction to be drawn for the second category of vehicles—those which legitimately ply between the islands and the mainland providing an island and not a mainland service. In providing that service, it is necessary for them to travel to the mainland to deliver and bring back goods. During that process, they attract charges which are not imposed on other haulage operators because they pay substantial ferry costs, which the hon. Member for Argyll and Bute has mentioned. Those charges are reflected in the costs that the hauliers pass to their customers. There is a separate case to he argued for them.

The third category was not mentioned by the hon. Member for Argyll and Bute, and it is at the root of why the legislation has been produced. The hon. Member for St. Ives (Mr. Harris) is in his place and will recognise from another context the term quota hoppers. Such people recognise that they can gain advantages by registering on an island which has a certain privilege.

The hon. Member for Argyll and Bute and every Opposition Member as well as every Conservative Member, I hope, would say that such an abuse should be stamped out. That is the abuse against which the measure is directed, and it is practised by people who are not island operators but who can evade taxation by registering their businesses on islands.

Is it not possible for Conservative Members to stamp out an abuse, which we all agree should be stamped out, without penalising that tiny section of the community which operates legitimately and which should be the beneficiary of the status quo? With the might of the civil service behind them, Ministers should be able to find a way of striking against those who abuse the system, while protecting those who legitimately use it.

The Scottish Road Haulage Association feels that its members, who operate on the mainland, are at an unfair disadvantage with those pirate operators who use the islands as a kind of flag of convenience. That is the abuse that Ministers, in so far as they know anything about the matter, should strike against. In doing so, they should not discriminate against legitimate island operators. That is a fair argument that should transcend party boundaries.

I do not think that many of the operators I am arguing on behalf of tonight are my voters. I do not care or ask about that, but I suspect that they might not be Labour voters—employers in that industry do not traditionally vote Labour. I am arguing not from that point of view, but from that of fairness and of the legitimate interests of fragile island communities.

Make no mistake: if the measure goes through, some small haulage businesses will go bust. They will have to take lorries off the road, make people redundant and pass on costs to users, so for heaven's sake, let us in Committee have a common-sense solution and retain the advantage for small island operators and for people who legitimately ply between island and mainland. Let us unite and stamp out the abuse of using islands as a flag of convenience to avoid taxation.

Mr. James Wallace (Orkney and Shetland)

My hon. Friend the Member for Argyll and Bute (Mrs. Michie) and the hon. Member for Cunninghame, North (Mr. Wilson) have deployed powerful arguments as to why the Government should rethink their decision to impose a substantial amount of vehicle excise duty on islands-based hauliers. I add my endorsement to their arguments.

As has already been said, we are dealing with islands that often have poor roads that add up to small amounts of mileage. They are being asked to pay the same amount as hauliers who are based, for example, in Birmingham, and who have immediate access to hundreds of miles of motorway. That in itself is an anomaly.

The Government have several times said that they are in favour of lifting the burden on small businesses. That does not square with the decision to impose on those businesses the financial burden that my hon. Friend the Member for Argyll and Bute illustrated. If the measure goes through, in the first year the increase for small islands-based hauliers has been limited to £1,000. Even that is a significant increase. In subsequent years, it could be even more.

I do not necessarily subscribe to the comment of hon. Member for Cunninghame, North that this is some conspiracy hatched by civil servants because they got out of the wrong side of bed or because the morning train from Chipping Norton did not arrive. I think that I am right in saying that there have been a considerable number of exemptions to the vehicle excise duty. That allows the basic rate of £150 to be paid. I suspect that the islands' case has been swept up along with the rest of the cases.

I hope that the Paymaster General has heard enough arguments to persuade him to think again. By imposing the burden on many islands-based hauliers, he proposes a financial burden that many of them will not be able to accommodate in their businesses. If they do, it will mean considerable extra costs for their customers. We are talking about people who serve islands of only a few hundred people. The position is not the same as that referred to by the hon. Member for Londonderry, East (Mr. Ross).

In my constituency, the exemption is applied only to the smaller islands. It is not applied to the main islands of Orkney and Shetland, which, it is recognised, have historically had plating and testing stations. Therefore, they did not qualify. Equally, no pressure has been exerted for the exemption to apply.

People would be horrified to discover, however, that additional costs will be imposed in the smaller islands. I hope, that the Minister will show some of the sensitivity and intelligence that was attributed to his hon. Friend the Member for Salisbury (Mr. Key), and that he will be prepared to reconsider the proposal and introduce a fair solution for islands-based hauliers.

Mr. Harris


Mr. Barry Porter (Wirral, South)

There are more of them.

Mr. Harris

Yes, there are more of them, and I am one of them. I also represent a group of islands—the Isles of Scilly—and I am horrified by what I have heard tonight. I thought that the issue had been settled by my hon. Friend the Member for Salisbury (Mr. Key). Like others, I had correspondence with him, and I thought that we had come to a completely satisfactory and sensible solution. If that is not the case—it is news to me that, apparently, it has all been upset—I shall be after my hon. Friend tonight. I do not say that as a threat, but I look to the Minister to reassure me.

Hauliers operating on the Isles of Scilly come into the first category. There are only a few hauliers there, and their vehicles never leave. Unlike the Scottish isles, the Isles of Scilly do not have a roll on/roll off ferry, and certainly do not have a subsidised ferry service to the mainland. It is a matter of great regret to my constituents, who look with envy at what their Scottish counterparts have.

In those circumstances, it would surely be extremely unfair if the three or four haulage firms that operate lorries on the small island of St. Mary's—the only island on which there are hauliers—were penalised as has been suggested. I look to the Minister for reassurance and await his comments with interest. I am sure that there has been a mistake, but if not, I suggest that my hon. Friend had better think again.

Mr. Calum Macdonald (Western Isles)

I shall not go into great detail, as the arguments have already been well made by the hon. Member for Argyll and Bute (Mrs. Michie), whom I congratulate on moving the amendment, and my hon. Friend the hon. Member for Cunninghame, North (Mr. Wilson), who I think was the first to support the move by the Department of Transport and pursue it with the Minister involved.

I shall make three points. The first is self-evident: islands, especially the Scottish islands, are a special case. A mark of good-quality legislation would be that it took into account the special needs and distinctive nature of the Scottish and other island communities.

It is ridiculous to think that one law and one regulation can properly cover all communities in the United Kingdom, from Tunbridge Wells to the Western Isles. There are clearly vast differences in the nature of the communities and the circumstances they face. We should be mindful of that fact and careful to reflect it in our legislation. That is why the exemption has existed for so long. It is absurd to suggest that we should attempt to apply the same regulation uniformly the length and breadth of the British Isles.

Secondly, having emphasised that islands are a special case, we need to emphasise that our communications are almost by definition of crucial importance to island communities, not only communications between them and the mainland but communications among the islands themselves. Anything that strikes a blow at the viability of our communications strikes a blow at the viability of the island communities.

The third point is just as important as the first two. All of us who were in correspondence with the former Minister, the hon. Member for Salisbury (Mr. Key), received an assurance that the matter under discussion was to be reviewed. We then assumed that we would in due course receive a letter telling us the outcome of the review. It is outrageous that the Government have instead apparently reached a conclusion without having had the courtesy to inform us of what they intend to do.

Will the Minister not only reflect on the points that have been made and—hopefully—respond positively to them, but also explain why none of the hon. Members who raised the issue with the Government and who were assured by the Government were approached before this matter was introduced in the Finance Bill?

11 pm

Dr. John Marek (Wrexham)

I support the amendment moved by the hon. Member for Argyll and Bute (Mrs. Michie). I think that I understand why the Government have proposed this extra tax. It does not affect the constituency of any Conservative Member—until tonight. The hon. Member for St. Ives (Mr. Harris) is an extremely valuable Member. If the matter were to affect his constituency, the Government would begin to worry.

At the moment, the Government do not worry about those constituencies that they cannot win. They are concerned only with getting money for the Treasury. The Government get that money through vehicle excise duties in a haphazard way every year. I will not accept the Minister's view that we have an imperfect system and that this year they are looking at it and that they may get it right next year or the year after that.

I want to bring to the Minister's attention a principle on which vehicle excise duty ought to be levied. It ought to be levied with some regard to track costs—the costs of road repairs that vehicles cause. The hon. Member for Argyll and Bute said that many vehicles covered by the amendment do not travel on roads. Therefore, presumably the track costs would be very light.

I refer the Minister to "The Allocation of Road Track Costs", a statistics bulletin issued by the Department of Transport. The 1995–96 edition is ready, and I have it. It says: Tracks costs for vehicles of over 3.5 tonnes GVW are covered by the ratio of 1.4:1. Another category of vehicles consists of crown, disabled, other vehicles exempt from vehicle excise duty, haulage, machines, three-wheeled motor vehicles, special types, recovery vehicles and non-plateable vehicles. As I understand it, that category will catch all the vehicles which are the subject of the amendment.

Would we expect those track costs not to be covered? Would we expect them to be covered by a ratio of,perhaps, 0.7:1 or even of 1:1? That is not the case. The ratio is not even 1.4:1. Those vehicles are not covering their track costs by 1.4:1, they are already covering their track costs by 2.3:1. If they are already doing that, what on earth are the Government doing raising vehicle excise duty on those classes of vehicle? Is there any fairness in what they are doing? I do not believe there is. Is there any equity or justice in it? No. At best it is a muddle, and at worst it is mendacious.

The Government realise that there are no votes in the issue; there are no seats to be won. Therefore, they are trying to get money out of people they will never represent, who can least afford to pay. Even though the Government are collecting a very small amount, they are prepared to implement this proposal.

Instead of this proposal, if they had any integrity, they would put these extra charges on goods vehicles over 3.5 tonnes, which are covering costs on a ratio of 1.4:1, because those vehicles use the motorways and the roads on the mainland.

Mr. Salmond

I shall speak not to irritate Conservative Members, but to make two quick points. First, I endorse the comments of the hon. Members who represent island communities about the substantial injustice of this proposal. Secondly, I want to ask the Minister a specific question. The Minister heard the definition of the hon. Member for Cunninghame, North (Mr. Wilson) of the three categories of vehicles involved. I want to make absolutely sure that, when the Minister replies, he will estimate the cost of the change on the first two categories, and not give us the overall cost of stamping out the abuse in respect of the third category.

Very precisely, when the Minister replies, will he give the Treasury estimate of the cost of imposing this unfair tax on the first two categories mentioned by the hon. Member for Cunninghame, North—the vehicles that stay within the islands and the vehicles that ply an island trade—and not fob us off with the overall Treasury estimate of the cost of the third measure?

Mr. Barry Porter

On a point of order, Mr. Morris. Some little time ago, the House voted more or less with enthusiasm for something that I understand was called the Jopling reforms. What has happened?

The Chairman of Ways and Means (Mr. Michael Morris)

The Jopling recommendations do not apply to Committee stages.

Rev. Ian Paisley (Antrim, North)

I, too, represent an inhabited island—the island of Rathlin. When I was appointed to represent that island in this House, there were no roads on the island, no running water and no lighting system. No public housing had been built for years, and the harbour did not exist.

After 25 years, I am glad to tell the Committee that a good harbour exists now. We have public lighting, public water and public housing. At last we have roads. However, if I have to go back to Rathlin island and tell the people there that, with regard to the new ferry, they are going to pay through the nose for the little track of road to allow them to get their vehicles across to Ballycastle to have them reloaded to bring back their goods, they will cry out and say, Oh, that we had been left alone, for our estate now is worse than it was at the first. Mr. Morris, in case you were not aware, that was a quotation from scripture.

The case has been made for people in the quandary about which we are speaking. It is not very late: I have sat in the House until 3, 4 and 5 am. Surely we should have enough sense tonight, and the Minister instead, of sleeping, should have enough sense, to be wide awake and say, "Yes. There is an anomaly here, and I must face up to it and see that justice is done." I make that plea.

Mr. Heathcoat-Amory

The Committee has heard that vehicle excise duty at a concessionary rate of £150 is payable on some islands, irrespective of the weight of the lorry concerned. The only requirement is that the operators concerned are registered on those islands. There is no legal provision for that concession under existing law. The Driver and Vehicle Licensing Agency has granted and continued that concession because of the absence on those islands of a plating and testing station. That point was made by the hon. Member for Argyll and Bute (Mrs. Michie).

However, the introduction of revenue weight as the criterion for setting vehicle excise duty means that that consideration is irrelevant, as plating and testing are no longer going to be used for establishing the eligibility for vehicle excise duty or its concessions.

In addition, in practice there is no limit to the use that can be made of the vehicles elsewhere in the United Kingdom, because a vehicle that is validly licensed in one part of the UK can be used elsewhere. There is nothing to prevent them from competing directly with hauliers for services—

Mr. Harris

Will my hon. Friend give way?

Mr. Heathcoat-Amory

If my hon. Friend will forgive me, I will finish the point that I am making.

There is nothing to prevent those vehicles from competing for services between the islands and the mainland. Indeed, there is nothing to stop them working wholly on the mainland. That might have been the issue of abuse which was raised. We have seen the ridiculous situation of a vehicle being advertised for sale "with the benefit of Scottish island registration". That is clearly unfair.

Mr. Harris

The Committee appreciates the point, but the Minister says that there is nothing to stop a lorry moving from one island to the mainland. My hon. Friend knows the isles of Scilly. There is everything to prevent a lorry from moving from the isles of Scilly to the mainland, because there is no roll on/roll off ferry. Does my hon. Friend therefore accept that the isles of Scilly at least should be treated as a special case in that regard?

Mr. Heathcoat-Amory

My hon. Friend is not quite right. A vehicle does not even need to be transported from the island to the mainland. It can be registered in the island, but bought and used entirely on the mainland. That is clearly unacceptable.

For both legal and practical reasons, I invite—

Sir Patrick Cormack (Staffordshire, South)

Will my hon. Friend give way?

Mr. Wallace

Will the Minister give way?

Mr. Heathcoat-Amory

I am not giving way.

For legal and practical reasons, I invite the Committee to regard the United Kingdom, for taxation purposes, as a single unit, and to reject the amendment.

Mrs. Ray Michie

I thank hon. Members, not least the hon. Members for St. Ives (Mr. Harris) and for Antrim, North (Rev. Ian Paisley), for their support. I know all about Rathlin island, and that we want a ferry to come from Ballycastle to Campbeltown in my constituency.

Mr. Wilson

And Ardrossan.

Mrs. Michie

As the hon. Member for Cunninghame, North (Mr. Wilson) says, and Ardrossan.

I am seriously disappointed by the Minister's reply. I hoped that he would say that he would discuss the matter with the Department of Transport, and would come back to the Committee with something worth while.

Sir Patrick Cormack

I had hoped to ask this question of my hon. Friend the Minister, but has she ever put to him the fact that the vehicles that are not causing the abuse should have a special registration number?

Mrs. Michie

That is a valid point. Perhaps the Minister will answer it. As for such vehicles being able to operate somewhere else, that is absolutely ridiculous. Many of those lorries are kept by farmers or builders. They work only on the island. They do not go off the island looking for work elsewhere. Like the hon. Member for St. Ives, I think that there has been a terrible mistake.

Mr. Wallace

My hon. Friend will have heard the Minister give as part of his main reason—indeed, it was almost the centrepiece of his resistance to the amendment—that there is no legal basis to distinguish between hauliers who are genuine and those who are causing abuse. Has it occurred to my hon. Friend that the Minister has been a Member of Parliament for eleven and a half years, and that it might not yet have dawned on him that part of our reason for being here is to make laws? That is what I thought we were doing. Therefore, the Minister's excuse is entirely fatuous.

Mrs. Michie

I am grateful to my hon. Friend. We all know that, if the Minister and his Department want to do something, they have the political will to do it, and they can change things if they need to be changed. I am asking the Minister to change something on behalf of the islanders of Scotland.

Mr. Salmond

The hon. Lady will know that I made a brief intervention to ask only one question of the Minister, which he totally failed to answer. Does the hon. Lady agree that it is a sign of weakness that a Minister sits down because his speech is so ridiculous that he is inciting the anger of Conservative Members behind him?

Mrs. Michie

The hon. Gentleman makes his point in no uncertain terms. I hope that we will be able to press—

Mr. Anthony Steen (South Hams)

Will the hon. Lady give way?

Mrs. Michie

I do not want to detain the Committee. [Interruption.] I am happy; I thought that Conservative Members wanted to go to bed.

Mr. Steen

Will the hon. Lady give the House some idea of how many vehicles she is talking about? I have an island in my constituency which lies half a mile off the coast. It does not have a haulage contracting business but—from what the hon. Lady has said—I am quite sure that the last thing anybody would do would be to start a haulage contracting business on that island.

Mrs. Michie

One of the bigger contractors about which I told the House and which operates shunt units carries perhaps eight vehicles in a day's passage of ferries. Those shunt units are now to be subject to vehicle excise duty.

On the island of Islay, there are probably eight or 10 lorries used in the building of houses or by farmers for carrying hay and that sort of thing. If one includes all the islands of the Western Isles and Orkney and Shetland, there are plenty of contractors and small lorry operators.

We will put the amendment to a vote, because many Conservative Members have spent lots of happy holidays on the islands of my constituency. They know lots of people on the islands and the people know them, and they will be very interested to see who will vote against the islanders of Argyll and Bute.

11.15 pm
Mr. Macdonald

It is unfortunate that the Minister is detaining the House because of the inadequacy of his reply. The reasons that he gave in reply to hon. Members were shallow indeed. The notion that there is currently no way of distinguishing between those vehicles which remain within the islands and vehicles which abuse the system by being used on the mainland is no excuse.

I pointed out in my initial remarks that the Department of Transport had said to a number of hon. Members on both sides of the House that it was conducting a review to discover a legal basis for distinguishing between vehicles which are abusing the system and genuine vehicles. That review must have happened, because the Minister at the Department of Transport said that it would be happening. We need to know what conclusions were reached and what options were considered and discarded.

The Minister cannot simply stand up and say that there is no legal basis for distinguishing between vehicles, because the Government have said that they are looking at the matter. It is wholly inadequate for the Minister to sit on his haunches and leave it at that. Even if he does not answer tonight—he may not have the papers from the Department of Transport with him—the Minister ought at least to have the courtesy to say that he will reconsider the matter. Unless he can provide an answer to the questions—I shall be happy to give way if he wishes to do so—the Minister should ask his colleagues at the Department of Transport what the result of the review was, and then inform the Committee.

Most especially, the Minister should have the courtesy to inform those hon. Members who were promised by a former Minister at the Department of Transport that there would be a review. As hon. Members were given that promise, the Minister cannot simply wash his hands of the whole matter. It is a simple matter of courtesy, if nothing else.

Dr. Marek

I shall be brief. I listened carefully to the Minister, and he did not provide answers to any of the different questions which were put to him. I have searched my memory and, in the 11 years I have been a Member of Parliament, I have never heard such a wooden and stilted response from a Minister who saw common sense staring him in the face, and turned away. The Minister does not do the House, the people in general or the people on the islands a service by behaving in that wooden and disinterested manner.

Can the Minister consult his officials and the Department of Transport? He can see what the will of the House is. If he has any respect for it, instead of dragooning his hon. Friends, by inviting them to vote for a measure in which they do not believe, he should promise at the Dispatch Box to reconsider the matter and table amended proposals on Report.

Sir Patrick Cormack

I have considerable respect for my hon. Friend the Paymaster General. Can he answer one question? I had hoped to ask him while he was speaking, but he would not give way and I also mentioned the matter to the hon. Member for Argyll and Bute (Mrs. Michie). Why cannot those vehicles that are restricted to the islands and never allowed to go anywhere else have a special registration number and a coloured plate, as my hon. Friend the Member for South Hams (Mr. Steen) suggested? Why cannot they alone be exempt and given favourable treatment? It would cost very little, it would satisfy my hon. Friend the Member for St. Ives (Mr. Harris) and most of the other hon. Members who have spoken, and it would show that my hon. Friend had listened to the arguments.

Mr. Wilson

I am speaking again not merely because of the inadequacy of the Minister's reply, but because of the bogus point of order raised by the hon. Member for Wirral, South (Mr. Porter). The House should understand one thing. We have heard hon. Members on both sides of the House state a rational case in defence of a small number of people and of fragile communities that do not have much representation in this House. It is completely unacceptable for an hon. Member to chastise us for making that case on the ground of the Jopling report and it is even more unacceptable for him to stagger out of the Chamber as soon as he has made that point. If anyone thinks that the Jopling report will be used as a device to stop the weak being heard late at night, they should relieve themselves of that view now. I hope that every hon. Member in every part of the House will agree with that.

The Minister's reply was grossly inadequate. The hon. Member for South Hams asked for numbers. He should not have had to do so because the Minister should have given them in his reply. If he had done so, the small number of hon. Members on both sides of the House who are affected could almost have done the arithmetic on their hands and feet, and told the Government how many genuine operators are affected in each of our constituencies. We could guess how many operators are using the islands as flags of convenience and could say that the problem is, for example, 10:1—one is legitimate and 10 are illegitimate, or whatever the figure might be.

The Minister's incredibly inadequate answer revealed the fact that hon. Members on both sides of the House have argued a reasonable case and that he has no answer. Will the Minister tell me what part of Tory philosophy it is to penalise a small number of legitimate business men—small businesses in island communities—because the Government have not the courage, vision or skill to clamp down on abuse? Why should the people who engage in abuse win? They will do so, in the sense that the Government believe that the only way to deal with that abuse is to clamp down on the people who are not guilty.

Why should the big operator, who has never even had a lorry on the island in which he or she is registered according to the Minister's statement, be able to ensure that operators in the Isles of Scilly, in a marginal Tory seat, pay the full, whack? Why should someone who runs their lorries out of Birmingham be able to discriminate against my constituents on Arran or Cumbrae because Ministers do not have sufficient interest to clamp down on abuse and would rather clamp down on the legitimate operator?

If the Minister can answer any of those questions, he should get to his feet. If he cannot answer them, he should withdraw the proposal for the time being, seek further advice from the people who have given him bum advice and bring back the issue later.

Rev. William McCrea (Mid-Ulster)

Earlier in this debate, the hon. Member for Argyll and Bute (Mrs. Michie) made a carefully presented and thoughtful speech. Powerful arguments were put and questions were posed which have not been answered. The Minister does the House a great discourtesy and his reputation a disservice by failing to answer those specific questions.

If the House is being asked to decide and vote, questions should be answered honourably. The Minister should therefore come to the Dispatch Box and answer the questions before a Division is called.

Mr. Harris

I make an earnest and sincere appeal to my hon. Friend the Minister. He has shown great flexibility in handling the Bill and I am grateful for the changes that he has made. I went to see him with colleagues last week. I am sure that he appreciates the fact that there is real feeling on this matter. I plead with him to take it away and look at it again, otherwise he will put me in a difficult position.

Mr. Heathcoat-Amory

The House and the Government have many ways of helping various parts of the United Kingdom, including the islands, which are the subject of this amendment. But it is not right to use the taxation system for vehicles as the amendment requires.

We have an opportunity to remove not just an anomaly but an abuse. Hon. Members who have spoken in the debate have described how and agreed that such an abuse takes place. It is right that island communities around the United Kingdom should receive differing amounts of help through various systems. Vehicle excise duty is a United Kingdom tax and, in answer to my hon. Friend the Member for Staffordshire, South (Sir P. Cormack), I am not prepared to see various licence plates for different parts of the United Kingdom solely on the basis of concessions granted in those other parts of the United Kingdom.

We assert the unity of the United Kingdom for taxation purposes, which is why I invite the Committee to reject the amendment.

Mr. Macdonald

The Minister's response is as inadequate as the previous one, because it ignores the fact that several hon. Members were assured that the Department of Transport was looking at the matter.

The Minister said that he has ruled on principle that the exception is to close, yet that is not what the Department of Transport told us. It specifically said that it understood the point being made and would actively seek ways to deal with it. We have had no response from the Department of Transport or any other Department on that issue, so it is wrong for the Minister now to say that the matter cannot be considered in principle

The Department of Transport has already conceded the value of the exception and said that it would look at the mechanics of trying to achieve a solution. For the Minister now to turn round and simply say that the review should not have taken place is wholly inadequate. We were promised a review and still need to know what the review discovered.

I do not see the Minister's problem. The wheels of Government will not grind to a halt, nor will their revenues dry up if he takes this opportunity to consult the Department of Transport and return with full information on Report.

Ms Primarolo

Will the Minister reconsider his statement to the House? He conceded that certain island communities will experience difficulties because of the Government's decision to standardise vehicle excise duty. He also admitted that those communities require additional help because of their vulnerabilities and unique position.

So that the Committee can make progress, I suggest that we proceed with the Minister's proposals for vehicle excise duty, but I ask him to give an undertaking that we will deal with the question of concessions to the islanders—whose case has been put this evening—on Report. If he fails to give that assurance, the Committee will be deadlocked and I am sure that he does not want that to occur this evening. We must find a way of drafting solutions to meet the islanders' demands.

11.30 pm
Mr. Salmond

The Minister has been asked on several occasions to quantify the cost of exempting the proper cases which were outlined by the hon. Member for Cunninghame, North (Mr. Wilson). I have listened to the Minister reply to questions about many Opposition amendments during the Committee stage of the Finance Bill and every time he has begun by saying that the amendment will cost the Revenue and the Treasury so much money that he cannot concede it.

Although he has been asked about the cost several times tonight, he has chosen not to reply to that question. That leads me to two conclusions: first, that the Minister does not know the cost of retaining the concession for those deserving cases, which means that the matter has not been considered properly and the Minister should withdraw it; or, secondly, he knows how much it will cost but he is not prepared to tell the Committee because the sum is so embarrassingly small that it will expose the Government as doing island communities a grave injustice for the sake of perhaps a few million pounds.

For the third time, I ask the Minister to quantify now the cost of retaining the concession in the category 1 and 2 cases that were outlined earlier by the hon. Member for Cunninghame, North.

Mr. John Home Robertson (East Lothian)

There are no inhabited islands off the coast of my constituency, but I have been following the debate with great interest. It is one of the most extraordinary debates that I have witnessed during my career in the House of Commons.

My hon. Friends the Members for Western Isles (Mr. Macdonald) and for Cunninghame, North (Mr. Wilson), the hon. Members for St. Ives (Mr. Harris), for Antrim, North (Rev. Ian Paisley), for Argyll and Bute (Mrs. Michie) and for Orkney and Shetland (Mr. Wallace) explained that they corresponded and had meetings with the former Minister for Transport, the hon. Member for Salisbury (Mr. Key), who has been in his place during the debate. He assured them, as a Minister of the Crown and on behalf of the Government, that ways would be found to ensure that island hauliers were provided for appropriately in any future framework.

However, in responding to the debate a Treasury Minister has discounted all of those assurances and has tried to give the Committee the impression that the discussions never took place. That is a most intolerable position for hon. Members to be in and I do not think that the Committee should accept a reply like that from any Minister in any Government.

I hope that the Minister will return to the Dispatch Box tonight and demonstrate that he is speaking on behalf of a united Government, instead of the Department of Transport saying one thing and the Treasury saying something else. That is no way to run a Government and it is certainly no way to manage fragile island communities in the Western Isles or anywhere else. It will be to his eternal discredit if the hon. Gentleman does not reply to the debate sensibly.

Mr. Wallace

I endorse the proposal put by the Member for Bristol, South (Ms Primarolo); it is a sensible way to proceed. The Minister should give such an undertaking and we can then return to the matter on Report.

Judging from the way that he replied to the Committee this evening, it appears that the Minister was given a brief to deal with an amendment at the fag-end of a sitting which failed totally to address many of the substantive issues that were put to him from both sides of the Committee. No hon. Members on either side of the Committee have attempted to defend the abuse which has taken place; that point was conceded. We ask the Government to devise a means to stamp on abuse so that people who genuinely want to proceed with their businesses—and who do not have a basis for increasing their revenue or the turnover to withstand the amounts in question—can do so. I am not sure what would happen if, a year down the track, some businesses go under and valuable haulage services are lost.

It is no use the Paymaster General repeating the mantra of a united taxation system. That principle has already been breached by what has gone before. We heard that the Department of Transport is already reviewing the system and is prepared to countenance a different situation.

Mr. William Ross

The same taxation system has not always applied. I ask the Committee to consider what happened in respect of the community charge.

Mr. Wallace

The hon. Gentleman makes a pertinent and obvious point. Some of us well remember that we had to pay the community charge long before other parts of the United Kingdom.

Mr. William Ross

Northern Ireland never paid it.

Mr. Wallace

As the hon. Gentleman says, Northern Ireland never paid the community charge. The Government's weak arguments have not addressed the substantive issues. It would be helpful and consistent with the mood of the Committee if the Minister would say that we can return to this matter after it has been given proper consideration and we know the outcome of the review promised by the Department of Transport to me and to many other hon. Members.

Dr. Marek

The Paymaster General said that he was responsible for United Kingdom taxation, and the implication was that if duty for a vehicle in central London is to be £500, the same duty would be payable for a vehicle in Canna or any of the other Scottish islands. That cannot be right. Taxation should be fair and seen to be fair. How can a comparison be made between a vehicle on a small Scottish island that can travel only in a circle, for a distance of 12 miles—

Mr. Home Robertson

Or less.

Dr. Marek

Or less, as my hon. Friend says—with a vehicle in London that might travel 10,000 or 12,000 miles a month? It cannot be right for both vehicles to be taxed the same amount.

The Paymaster General says that he is responsible for taxation as a Minister of the United Kingdom Parliament, but he is not weighing all the considerations properly. He must take into account equity and fairness, and appreciate that the public must be satisfied that his proposals are fair. I cannot imagine any member of the public in the British Isles arguing that because a vehicle on a small island in Scotland is to be taxed at £500, the same amount must apply to a vehicle registered in central London. That arrangement would be blatantly unfair.

We are not asking the right hon. Gentleman to make up legislation on the spot, at the Dispatch Box. Hon. Members on both sides of the Committee implored hire to think about the points that have been made. Most importantly, the excellent point put by the hon. Member for Staffordshire, South (Sir P. Cormack) deserves consideration in the quiet solitude of the Minister's room, rather than in Committee.

It is clear that both sides of the Committee believe that a gross unfairness will be perpetrated unless the Minister does something. Unless we can be sure that the Minister will take cognisance of that, hon. Members in all parts of the Committee will be most disgruntled. I urge the Minister, as a matter of common sense, to think again.

Mr. Heathcoat-Amory

Of course the House can return to this issue on another occasion—certainly on Report. But I ask the Committee to reject the amendment in the full knowledge that the procedures of the House allow the House to return to it another time.

Mr. Wilson

I make no apology for keeping the debate going. Why on earth should people legislate when they have not the slightest idea of the consequences of what they are legislating for? The moment the Minister rises to give us some information in response to the points that we have been making, I shall sit down. That will be the end of it.

How many vehicles are affected by the provision? How many of them never leave the islands? How many of them have never been on the islands in question?

Mr. Heathcoat-Amory

The hon. Gentleman is asking me a question that is impossible to answer. How can anyone know whether a vehicle has left an island? We do not run a police state in which vehicles are followed from the islands to the mainland. It is self-evidently absurd to ask me for information that does not and cannot exist, either in my Department or in the public domain.

The hon. Member for Banff and Buchan (Mr. Salmond) asked me about three categories of expenditure on which no information exists. Indeed, they are not possible to identify. If they were, I would be the first to give the hon. Member the information that he requires—

Several hon. Members


The Second Deputy Chairman of Ways and Means (Dame Janet Fookes)

Order. The Minister is already intervening. We cannot have interventions in interventions.

Mr. Harris

On a point of order, Madam Deputy Speaker. Can the House return on Report to a matter dealt with by the Committee, unless the Government move an amendment dealing with it?

The Second Deputy Chairman

It is a matter for Madam Speaker whether to select amendments or new clauses on Report.

Rev. Ian Paisley

On a point of order, Madam Deputy Speaker. How can we make up our minds when the Minister has told us that he cannot possibly give us the information? He says that there is abuse, but he cannot have it both ways. If he cannot give the numbers to the Committee, how does he know how many people are abusing the system?

The Second Deputy Chairman

The Chair is not responsible for the content of speeches.

Mr. Wilson

This is a rare parliamentary occasion. Every time the Minister rises to his feet, he exposes just how little he knows about what he is trying to put into statute. Is he talking about hundreds or thousands; about millions of pounds or tens of thousands of pounds? He can give us no inkling, because he does not know.

Even worse, the Minister does not know how many vehicles are involved, or how many of their owners abuse the system. The hon. Member for Salisbury (Mr. Key) promised to explore the point when we contacted him. Surely the Driver and Vehicle Licensing Agency knows the answer to this problem. Let us say that 500 legitimate companies benefit from the islands allowance and 10,000 abuse the system—but the Minister does not know. He would then be under the impression that the number of firms affected by the provision was the total. The Minister has had no briefing on the substance of our point, which is that only a tiny number of firms is involved.

What the Minister is hoping for here is to brass-neck it through to a vote, to push it through, and then that would be the end of the matter. Opposition Members who represent island communities are not disposed to let him do that. He is being humiliated by his own ignorance and he should accept that.

He should withdraw the proposal. He should accept the fact that he has no idea about the amount of revenue or the amount of abuse that is involved, and therefore he does not know what he is legislating for. Afterwards, he can take it up with the people who failed to advise him, who told him that this was a little thing that would slip through late at night because of the Jopling report, who said that only a handful of yokels in the furthest periphery were affected.

I hope that the Minister has learnt a lesson tonight, because when he starts messing about with people on that basis, he will not get away with it. When he starts messing about with islands, the interests of which some of us work very hard to defend, he will not get away with it. He cannot tell us anything that he is trying to do tonight in any detail. Until he does, we shall make him talk. We shall make him explain. We shall continue to ask him for the statistics on which the proposed legislation is based. So the Minister had better bring some statistics to the Dispatch Box, or else recognise that he is in for a long night.

11.45 pm
Sir David Steel (Tweeddale, Ettrick and Lauderdale)

I have been listening to the entire debate. I do not represent any islands, and came to the subject completely new. I do not think that the Minister has treated the Committee fairly. Having listened to the strength of the debate—hon. Members from six different political parties have spoken—I know that it is not a party issue. It is clearly an issue on behalf of a geographical minority.

When the Minister invites the Committee to reject the amendment and says that the matter can be raised at some later stage, he is not correct. He knows perfectly well that, if it is rejected, the chance of this issue being selected on Report is remote. We all know that. What he should do is invite my hon. Friend the Member for Argyll and Bute (Mrs. Michie) to withdraw the amendment, on the assurance not that he can solve the problem but that he will discuss it with his colleagues in the Department of Transport and come back to the House on Report with a more lucid explanation and, if possible, a solution. If he did that, we could make real progress.

Mr. Heathcoat-Amory

In saying that the matter could be raised on Report, I meant that if it is the wish of the House to discuss the issue further on Report—you said, Dame Janet, that it is a matter for Madam Speaker—I shall certainly do what I can to ensure that the House has an opportunity to discuss it. I have no reason or motive to prevent fair discussion on a matter that is clearly of interest to hon. Members and their constituents. I am certain that I gave a reason for rejecting the amendment, which is based on studies of the existing situation—an anomaly that is not founded in law and that invites abuse.

I gave examples earlier of people advertising that abuse of the system in newspapers. The precise number of people abusing the system is, by definition, unknown. It is rather like fraud. One cannot quantify it precisely because it is unmeasurable. I am very happy to give the assurance that, if the House wishes to discuss the matter later on Report, I will do what I can to ensure that it is given that opportunity.

Sir David Steel

The Minister has a deserved reputation for intelligence and courtesy. I think that he should go a little further and invite my hon. Friend to withdraw the amendment so that it could be raised again on Report. Having listened to the debate, he is under an obligation to discuss with his colleagues in the Department of Transport what happened to the review and to the assurances that were given in letters to various hon. Members. That is the least that the Committee is entitled to expect of him. If he would just go that far, I am sure that we could make progress and return to the matter again.

Mr. Macdonald

We are making a little progress, but we still need some clarification. The Minister said that the House could return to the matter on Report, but he knows as well as anybody that the procedure—the proper way to ensure that the matter is discussed on Report—is for him to invite the mover of the amendment to withdraw it. The Committee will then read that as an understanding, a commitment, that the Minister will genuinely look at the matter to try to find out what happened to the reports that were drawn up by the Department of Transport.

I hope that he will use the time between now and Report to meet hon. Members who raised the matter with the Department of Transport, to talk it through with us and to make available to us the reports that the Department drew up—or was thinking of drawing up at one stage—plus any additional material that he thinks germane to the discussion.

It is not right to leave the matter hanging by simply saying that the House can return to it at a later stage. If the Minister invited the hon. Member for Argyll and Bute (Mrs. Michie) to withdraw her amendment, we should all know where we stood. The Minister knows the forms and courtesies of the House as well as anyone; if he genuinely meant the offer that he appeared to be making—the offer to deal with the issue at a later stage—he would follow it through by inviting the hon. Lady to withdraw the amendment.

If the Minister proves not to have made such an invitation, however, we must conclude that he did not really mean what he said about the House being able to consider the matter on Report. He has left confusion in the minds of hon. Members, and I think that it is incumbent on him to clear it up.

Mr. Heathcoat-Amory

Whether the hon. Member for Argyll and Bute (Mrs. Michie) presses her amendment must be a matter for her. I have said that, if she does so, I must invite my hon. Friends to reject it; but I have also said that the House is fully entitled to debate further issues on which it feels strongly, and I assert its right to debate issues of public importance.

I go further than that, and say that the proper procedure is for the matter to be returned to on Report. I shall certainly endeavour to ensure that that is done, if the desired result cannot be achieved simply by the hon. Lady tabling her own amendments. That would enable the House to take a further look at the issue by using its regular and proper procedures.

Mr. Macdonald

Another inch of progress has been made, in that the Minister has suggested that the proper procedure is for us to discuss the matter further on Report, thus implying that the hon. Member for Argyll and Bute should withdraw her amendment. He would clarify matters further, however, if he assured us that, if she does so, he will, before Report, meet all hon. Members on both sides of the House who have raised the matter. We have had letters from the Department of Transport saying that the matter would be considered; it would be only courteous of the Minister—the courtesy that I would expect of him—to agree to meet us before Report.

Mr. Home Robertson

Responding to an intervention from the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel), the Minister referred to the existence of studies of the detailed implications of the concession and the amendment. It might be helpful to my hon. Friend and other hon. Members representing island constituencies if copies of those studies were made available: perhaps they could be placed in the Library of the House, in anticipation of further discussions of the subject.

Mr. Macdonald

My hon. Friend is absolutely right. Before meeting the Minister, we would have to have whatever information he considers relevant.

The Minister seemed to suggest that he would not be willing to meet his hon. Friends, along with Opposition Members, to discuss the matter before Report, even after the hon. Member for Argyll and Bute had withdrawn her amendment. That is a startling and even shocking thing to say.

Mr. Heathcoat-Amory

I have never refused to meet hon. Members on matters within my public responsibilities. If the hon. Lady or any other hon. Member wishes to discuss the matter with me, I shall naturally accede to that request.

Mr. Macdonald

We are making progress bit by bit. My understanding is that the Minister is saying that the proper way to proceed would be to discuss the matter on Report. If the hon. Lady withdraws her amendment, all interested Members would have an opportunity to meet the Minister to discuss the matter in a more measured way and, hopefully, at a better hour. That is one way of proceeding with the matter. The Committee is disturbed that an issue, which in one sense is small but is nevertheless vital, is being dealt with in a way that does not do it adequate justice. I think that hon. Members in all parts of the Committee have recognised that simply to reject the issue out of hand would not be justice.

Sir Patrick Cormack

On my own behalf and that of my hon. Friend the Member for St. Ives (Mr. Harris) may I appeal to the Minister and the hon. Member for Argyll and Bute (Mrs. Michie)? The Minister need only recognise that it is virtually unprecedented for an issue that has been voted upon to be brought back on Report. He should show that he has some of the sympathy for islanders that the House unitedly demonstrated in 1982. We need the hon. Lady to recognise that perhaps she may not have enough troops at her command and the only chance of the matter being debated again is if she recognises that she has many allies in all parts of the Committee and begs leave to withdraw the amendment.

Mrs. Ray Michie

If the Minister will tell me and the Committee that he will discuss the matter with his Department of Transport colleagues and will agree to meet me and other hon. Members from all parts of the House to discuss the issue further, and if he will present proposals, I shall be happy to withdraw the amendment. All that we ask him to do is to consult colleagues and meet us.

Mr. Heathcoat-Amory

I do not propose to repeat myself. I have already offered to discus this matter or any other within my responsibility with the hon. Lady or any other hon. Member. I am happy to give that assurance again. If the matter borders on the responsibility of another Department, I shall endeavour to obtain from the Minister concerned the authority to discuss on his behalf the matter being debated.

Mrs. Michie

I beg to ask leave to withdraw the amendment.

Hon. Members


Amendment negatived.

Mr. Macdonald

On a point of order, Dame Janet. Hon. Members who are trying to represent their constituents have been treated twice this evening to a grave discourtesy. First, we received from the Minister with responsibility for transport letters saying that the matter would be considered. We never had any follow-up to that and the undertaking was not kept to. Secondly, we appeared to have an understanding from the Paymaster General that, if we withdrew the amendment, it would be considered at the third stage, and we would have a meeting.

Clearly, an orchestrated manoeuvre by the Government Whips pushed the Question on the amendment to be put. Therefore, when he appeared to make the offer, the Minister was either unaware of what his Whips were doing, or, if he was aware, he was misleading hon. Members, who understood him to be offering to reconsider the matter at the third stage. That is a grave matter.

12 midnight

The Second Deputy Chairman

That is not a matter for the Chair. I can operate only the rules that exist and a single dissenting voice is sufficient not to permit an amendment to be withdrawn.

Mr. Salmond

On a point of order, Dame Janet. In view of what we have just seen, within the orders of the House, is it possible to emblazon on the Standing Orders the words, "Never trust a Tory Minister"?

The Second Deputy Chairman

That is not a point of order for the Chair. Mr. Brian Wilson. [Interruption.]

Mr. Wilson

I am happy to give way.

Mr. Beith

On point of order, Dame Janet. Recently, within the hearing of the Committee, you advised the Committee that it was for Madam Speaker to decide what could be selected on Report. It was in the light of what you said that an exchange took place, involving hon. Members of all parties, my hon. Friend the Member for Argyll and Bute and the Minister, in which, after some considerable persuasion, the Minister agreed that it would be possible for Madam Speaker to exercise her discretion, so that the matter could be raised again.

Then it clearly happened—not within your sight, but within your hearing—that the Government Deputy Chief Whip called a vote to prevent the amendment from being withdrawn, with the obvious intention of defeating the understanding that the Minister had reached in the light of what you had said. Therefore, I ask you to consider whether that action should be deprecated by you because it sought to set at naught the advice you had given the Committee.

The Second Deputy Chairman

Let me make it quite clear. I do not have the discretion, but Madam Speaker has full and total discretion in selecting amendments or new clauses on Report. I have no doubt that she will take all matters into consideration.

Mr. Wilson

On a point of order, Dame Janet. Can we have your assurance that you will give a full report to Madam Speaker of what has just transpired? Tonight, we have seen the excreta of political life in the person of the hon. Member for Derby, North (Mr. Knight), who has cheated the House—

The Second Deputy Chairman

Order. I know that the evening is late and that feelings have been running high, but we can conduct this debate in a civilised way? May I make the point again to all hon. Members: Madam Speaker has complete discretion. She is not bound by anything that may be said or done and, of course, she, as all other hon. Members, will be able to read a full account of the matter in Hansard.

Mr. Wilson

The Committee, which has listened in large numbers to the debate, heard the agreement that was reached between the hon. Member for Argyll and Bute and the Minister. Within minutes, one hon. Member cheated on that agreement. That is why we are still discussing the matter. If the Minister had a shred of honour in him, he would do what is within his power to rescue the situation, by saying now that the Government will table their own amendment on the subject to ensure that it is debated further. If what the hon. Member for Derby, North has done in the name of Government is followed to its logical conclusion, not only this small issue, but the whole arrangement for late-night proceedings of the House will be affected, because no one will ever trust those people again.

The Second Deputy Chairman

I have already made clear what the position is from the point of view of the Chair, and I have nothing to add to that.

Rev. Ian Paisley

On a point of order, Dame Janet. The Committee has listened tonight to the debate. The needs of a special proportion of our community, which stretches from Northern Ireland to Scotland, England and Wales, were put and, after much exchange, the Minister gave a clear undertaking. We accepted in good will that an arrangement would be made, that the hon. Member for Argyll and Bute (Mrs. Michie) would withdraw her amendment, and that, at another time, we would have the opportunity to come back. We all thought that the hon. Lady would be permitted to withdraw the amendment. After 25 years in this place, I am staggered to see something that has taken us all this time to get established being destroyed in a matter of seconds. If there is no trust in the House, how can we represent the people who send us here?

The Second Deputy Chairman

I repeat that Madam Speaker retains full discretion as to how she may handle any amendment or new clause that hon. Members seek to table on Report—nothing alters that.

Mr. Malcolm Bruce

Further to that point of order, Dame Janet. You will be reporting to Madam Speaker on the conduct of business under your chairmanship tonight. As the hon. Member for Antrim, North (Rev. Ian Paisley) has said, what is causing the Committee considerable concern is that we have this evening witnessed an unusual but proper use of this place, which is to draw assurances from the Government. The Government were not willing but we were making progress.

What concerns me is whether the Minister—reluctant as he was—knew in the very process of giving the undertaking that he would support the matter being discussed again on Report that the Government Whip was going to prevent the amendment being withdrawn. It is important that you find out, Dame Janet, and ensure that Madam Speaker knows exactly what happened.

The Second Deputy Chairman

I have nothing to add to what I have already said on that point.

Mr. Robert Maclennan (Caithness and Sutherland)

In reaching her decision—[Interruption.] I have listened to all the debate and I represent a constituency containing an island with three inhabitants.

If Madam Speaker is to judge fairly what happened and take everything into account, she will no doubt be extremely interested to know the attitude of the Minister in charge of the debate whose words induced my hon. Friend the Member for Argyll and Bute (Mrs. Michie) to seek to withdraw the amendment. It would be fair to the Committee if the Minister gave a sign at this stage, which Madam Speaker could read and which would help her to make up her mind, as to his intention.

The Minister will know that a motion voted against in the way that happened tonight is unlikely to reappear in the usual course of events unless he explains what the Government were seeking to do and that what the Deputy Chief Whip did was in the nature of a distraction, perhaps due to a lack of communication between the Minister and his colleagues further along the Bench. I therefore ask the Minister to tell us his intention; that is only fair to Madam Speaker and to the Committee.

The Second Deputy Chairman

The hon. Gentleman is repeating points that have already been made. It is very clear: Madam Speaker will have a full account of what has happened in Hansard, supplemented by answers to any questions that she may ask of me.

Rev. William McCrea

Hon. Members who have listened carefully to the debate heard the Minister promise that he would do all in his power to ensure that the matter could be raised again on Report. Does that promise still stand? If the Minister does not intervene to reassure the House that it does still stand, will you, Dame Janet, ensure that Madam Speaker will has that fact passed on to her?

Mr. Heathcoat-Amory

My words will have been recorded in the Official Report and I do not retreat one inch from what I said. I am certainly content, as I hope is the hon. Member for Argyll and Bute (Mrs. Michie), to let the matter rest with Madam Speaker.

Amendment made: No. 47, in schedule 4, page 189, leave out line 6.— [Mr. Wood.]

Question proposed, That the schedule be the Fourth schedule to the Bill.

Mr. Wilson

Dame Janet, I am delighted to be informed, as I trust that you will confirm, that the schedule is debatable. That, of course, gives us an opportunity to return to the question of vehicle excise duty affecting island communities.

I think that I can reasonably lay claim to a fairly comprehensive knowledge of the islands affected by the amendment in the schedule. I shall, of course, be anxious to take hon. Members through each of the islands affected. I am sure that Conservative Members will be very willing and interested to listen to the precise implications of their proposed legislation.

The terms of the schedule are especially important as they affect islands in my constituency and, therefore, I shall start with them. As you would expect, I shall move on to talk about islands in the constituency of my hon. Friend the Member for Western Isles (Mr. Macdonald), in which I have a certain journalistic interest, islands in the constituency of the hon. Member for Argyll and Bute (Mrs. Michie)—

Mr. Michael Carttiss (Great Yarmouth)

Name all the islands.

Mr. Wilson

No, not yet. I feel that it is far too early in my speech. I had the privilege of being born and growing up in the constituency of the hon. Member for Argyll and Bute. Indeed, I am a frequent visitor to the islands in the constituencies of other Opposition Members.

Unfortunately, I have not yet had the opportunity to visit the islands in the constituency of the hon. Member for St. Ives (Mr. Harris), who spoke so eloquently in support of amendment No. 41. I am sure that he feels every bit as cheated by the hon. Member for Derby, North (Mr. Knight) as I do. I am sure that the hon. Member for St. Ives will understand that the Conservative interest will read at least as badly in his local press as it will in the local press in the areas represented by the rest of us. That is something with which he will have to learn to live. I hope that he will manage to secure a meeting with the Minister in which the hon. Gentleman will understand that treating little people in this way is not very clever. To paraphrase words that could be used by hon. Members behind the Minister, "Even as you do unto the least of our children, so you do unto me."

That is the basis on which we set out to discuss the schedule and the impact on island communities of what is being proposed. Nobody should be in any doubt about the economic impact of the proposal. To talk about £4,000 vehicle excise duty on a vehicle which runs up and down the motorways—I could mention many roads along which vehicles run—is, of course, a reasonable charge over a year. When one applies—I think that every hon. Member in the House will understand this—that same principle to vehicles which operate in very small island communities, it is easy to see the absurdity of such a proposal.

If any Conservative Member, including the shamed Minister, cares to come to the Dispatch Box and tell me that it is right for a vehicle which circulates round an island which may have 10, 12, or 20 miles of road to pay the same as a vehicle which operates throughout the length and breadth of Britain, I shall be willing to give way. I suspect that they would have some difficulty in saying so. There is no logic in such a case. The reason that is coming forward is nothing to do with the islands which are being punished by the proposal and everything to do with the rigid bureaucracy of the Treasury and of the people who have advised Ministers.

At this stage, I want to stress how badly let down Opposition Members feel about the way in which we have been treated—not, I should stress, by the hon. Member for Salisbury (Mr. Key), who acted honourably. He listened to the case which we put on behalf of the island communities and he responded reasonably. Then this great hiatus appeared. The hon. Member for Salisbury lost his job and we heard no more about it. The promise that the Government would come back to us to discuss the reasoned case that we had put forward was ignored.

It was a source of astonishment to me, as it was to Conservative Members and other Opposition Members, when out of nowhere I received a letter from a haulier in my constituency, Mr. Bannatyre of Arran Haulage, in which he said that he had heard on the grapevine that the proposal was coming back through the Finance Bill.

Hon Members who had dealt with the matter received no notice. The promised review had not been carried through. We heard nothing about the proposal until it appeared in this form in the Bill.

12.15 am
Mr. Nigel Griffiths (Edinburgh, South)

On a point of order, Dame Janet. The annunciator system in the Chamber seems to have gone down. I am concerned that hon Members who may wish to come in and listen to my hon. Friend the Member for Cunninghame, North (Mr. Wilson) and many of my colleagues who wish to take part in the debate may not know that the Committee is still sitting and is likely to sit for some time yet. Although I see that the time—12.15 am—now appears on the monitor, the name of the hon. Member speaking is not revealed. It is important that the annunciator system should be functioning and I am glad to say that it is functioning once more. I am grateful to you, Dame Janet.

The Second Deputy Chairman of Ways and Means (Dame Janet Fookes)

It is obviously more convenient if the system is working, but it is not beyond the capacity of any hon. Member to walk to the Chamber to discover who is speaking.

Mr. Wilson

I am grateful for the fact that the annunciator is working, because it will allow me to keep an eye on the time as the hours go by.

I have not yet begun my tour of the islands. I am pleased to see my hon. Friend the Member for Hamilton (Mr. Robertson) in the Chamber. Not only was he born on the island of Islay, his middle name is Islay. It is not often that I regret the departure from the House of a Tory Member, but instead of the present pretty ghastly hon. Member for City of Chester (Mr. Brandreth), it would have been helpful to have the former Member for City of Chester here because he owned half of Islay—

The Second Deputy Chairman

Order. Although the hour is late, I deprecate adjectives of that kind. I ask the hon. Member for Cunninghame, North (Mr. Wilson) to guard against such language as he deploys his case.

Mr. Wilson

I apologise for my crude Celtic tongue. If the former Members for Devizes and for City of Chester were here, we would have a pair of Morrisons and between them they would own most of Islay. No doubt they would have argued with us this evening.

I do not want to intrude on the territory of the hon. Member for Argyll and Bute, but Islay is one of the most beautiful Hebridean islands. It is quite significantly different in terrain from the others, but it is economically very similar. It depends on its agriculture. Hon Members on both sides of the House will appreciate that the economic prospects of the distillery industry on Islay depend on the freight industry.

If I have time tonight, I will break Islay down into nine separate entities and talk about them in terms of the distilleries.

Mr. Thomas Graham (Renfrew, West and Inverclyde)

My hon. Friend will be aware that Strathclyde regional council carried out a poverty survey in the islands some years ago which showed that folk in that area desperately needed help and support. The welfare rights scheme showed that people were entitled to claim millions of pounds worth of unclaimed benefit. The terrible poverty was clear. The Government's proposals will create further poverty and the people on the islands will have to pay through the nose to buy food, groceries and all the rest because of the dramatic increase. As my hon. Friend will know, that increase will probably cause a repeat of the clearing of the highlands under the Tory landlords.

Mr. Wilson

I am grateful to my hon. Friend. He rightly highlights the reality of rural poverty in island communities. It is too often perceived that poverty is an urban phenomenon, whereas hon. Members who are familiar with island communities know that there is great poverty there, not least because of the disgracefully low wages paid by the estates and the people who subscribe to that philosophy.

The major factor—this point takes us back to the schedule—in conditioning the economy of the islands is freight costs and freight charges. That is why the issue is so important. To many hon. Members who live in large urban communities, the idea that £4,000, £10,000 or £20,000 in vehicle excise duty is a major economic factor within a community might seem absurd, but if one is running a fragile business within such a community and one is incurring extra costs, it is a major factor.

In terms of Islay, I remember the campaign by Strathclyde region. My hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) is absolutely right. However, I return to the point about the distilleries. In the old days, everything which came into Islay—the supplies for the distilleries—and everything that went out again in terms of the finished product went by puffer or by small cargo ships—namely, Caledonian MacBrayne cargo ships. I was saddened recently to receive a letter which told me that, because of a cut in Government subsidy, the very last puffer has disappeared from the whole of the western isles. The decline of the puffers, which is an interesting subject in itself, could—

Mr. Sam Galbraith (Strathkelvin and Bearsden)

Before my hon. Friend thinks about leaving Islay, he will realise that the island beside it is Jura, which one gets to by going through the roads of Islay and then taking a small ferry, which, incidentally, is not a MacBrayne ferry. How will the tax affect the people on Jura? My hon. Friend knows that there is a small section of road. That produces particular problems, my hon. Friend will agree, for those on Jura. The economy depends on tourism and people climbing to the top of Jura, and so on. If they have to face a terrific charge, what will that do for an island as beautiful as Jura, which is threatened by the tax?

Mr. Wilson

I am some way from Jura yet, despite its being very close to Islay. Indeed, many times from Islay I have looked across to Antrim. I have a family connection with Rathlin isle, which I might discuss some time with the hon. Members for Antrim, North (Rev. Ian Paisley) and for Mid-Ulster (Rev. William McCrea), who have been very supportive tonight.

It will be interesting to have the views of the distillery industry on Islay, because the tax will significantly increase costs of incoming grain and everything else that has to be brought in, and also outgoing products. With the decline of the puffers and MacBrayne's cargo fleet, everything has moved on to roll on/roll off ferries. They are primarily affected by the measure.

I bow to the hon. Member for Argyll and Bute, because I did not know until she said so tonight that the little shunting vehicles which take trailers on and off ferries are also to be covered. I can think of nothing more absurd. Where does anyone go with a shunting vehicle? Would a Conservative Member like to tell me where those little vehicles which are used on piers at ports operated by Caledonian MacBrayne go? They never go outside the marshalling area, never mind on an exotic journey down the M1. I see that we have now been joined by the Chief Secretary—

Mr. Andrew Mackinlay (Thurrock)

The next Prime Minister.

Mr. Wilson

I will not go down that road. In view of Dame Janet's strictures, I had better not say too much about that, even to prolong the debate—not that that is my purpose. I mean enrich the debate.

The Second Deputy Chairman

Order. The hon. Gentleman will enrich the debate by sticking closely to the schedule.

Mr. Wilson


Mr. Salmond

I am puzzled by the narrowness of the speech of the hon. Member for Cunninghame, North (Mr. Wilson). Is he aware that the schedule includes paragraphs on electrically propelled vehicles, road construction vehicles, roadrollers, snow clearing vehicles, street cleansing vehicles, power wagons used solely in connection with street lighting and vehicles used for short journeys between different parts of a person's land? When will the hon. Gentleman deal with those important topics?

Mr. Wilson

I do not want to be selfish and deal with them all myself. By the time I have dealt with the islands issue comprehensively, someone else may feel the muse upon them. My hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) invited me to refer to Jura, and there is no more appropriate place to move to than Jura.

At every isle we mention, I regret the passing of Conservative Members. Is there no longer an Astor in the House? If there were, surely he would be putting the case for Jura because that family owns half the island.

The Minister of State for the Armed Forces (Mr. Nicholas Soames)

He is in the Lords.

Mr. Wilson

The hon. Gentleman speaks for them all—the entire British aristocracy is epitomised in his beatific form. If the hon. Gentleman cares to intervene about Jura and its requirements, I shall certainly give way.

The metaphor that springs to mind regarding Jura is that what we are dealing with tonight is positively Orwellian. Orwell lived in Jura and wrote some of his greatest works there. The House is debating a taxation measure for which the Minister responsible cannot give the remotest estimate of the amount of money involved. The entire might of this great institution is devoted to an issue where the Minister cannot tell us how many vehicles are involved or what proportion of them are believed to be operating fraudulently.

If the Chief Secretary cares to intervene where his colleagues signally failed, I would be pleased to hear from him. There is plenty of time. The right hon. Gentleman can send out for the information which is somewhere in the files of his Department. I am shocked and astonished that the Chief Secretary has not been provided with the information, and that he has not been made aware of the previous correspondence of hon. Members with the hon. Member for Salisbury (Mr. Key). It is an Orwellian situation, in which the little people are supposed to accept what is happening to them because some mighty machine has told them.

Mr. Malcolm Bruce

Is the hon. Gentleman aware that it is not just the hon. Member for Salisbury who has given an undertaking? My hon. Friend the Member for Argyll and Bute (Mrs. Michie) has said that she has had a similar undertaking from the present Under-Secretary at the Department of Transport. It appears that the Department of Transport has been wholly persuaded by the argument and recognises the case, but it has not communicated with, the Treasury. The Department of Transport seems unwilling even to ask the Treasury while the issue is still being dealt with. Is not the position even worse than the hon. Gentleman describes?

Mr. Wilson

I am genuinely grateful to the hon. Member for Gordon (Mr. Bruce), because I did not know that. To be honest, I have not corresponded on the issue with the present Under-Secretary. I was asked about the matter recently, and I told my constituents—I thought in good faith—that the matter was pending, because I had an assurance from the hon. Member for Salisbury that it was under review.

I wrote to the Secretary of State for Transport two or three weeks ago and I passed on the renewed concern of my constituents. I congratulate the hon. Member for Argyll and Bute if, in the interim, she has been in touch with the present Under-Secretary. It is obvious either that none of the information has been communicated to Treasury Ministers, or that they have just brushed it aside, saying that it is all nonsense and that nobody cares about promises given in the House any more.

Dr. Norman A. Godman (Greenock and Port Glasgow)

Surely my hon. Friend is not surprised at the Government's indifference to those highland communities. About eight or nine months ago, he and I met the Minister of State at the Scottish Office to discuss the real fears surrounding the Glenlight shipping company, which has now ceased to trade largely because of the Government's failure to provide the subsidies that it needed.

Mr. Wilson

My hon. Friend is absolutely right and the problem is compounded. Not only did the Glenlight shipping company—a privately operated company—go out of business because that arrangement was ended, but at least two of the other coaster companies that operated at that time and whose existence Ministers used as a justification for not supporting Glenlight, have also gone out of business since. The Easdale Island company was the most recent. It operated the last puffers in the western isles and it too has gone out of business. The relevance of that, Mr. Deputy Speaker, is that, as coastal shipping declines, everything else is piled on to the roads and on to the car ferry system, and vehicle excise duty becomes crucial to all trade between the islands and the mainland.

12.30 am
Mr. Graham

My hon. Friend will be aware that the headquarters of Caledonian MacBrayne, which services most of the isles, is in my constituency. Tonight's announcement will create terrible stress and problems for my constituents who service the islands. They will be wondering whether the change in duty will mean a reduction in jobs because there will not be enough money to go around. Does that mean that, once again, my constituents will have to suffer further unemployment? Does it mean that the islands will suffer further unemployment because there will not be enough money to invest?

Mr. Wilson

My hon. Friend's concern for the employees of CalMac is well known. Indeed, we and my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) once jointly fought quite a successful campaign to keep CalMac's headquarters in Gourock. More recently, we fought a successful campaign to keep the company in the private sector.

I do not want to disturb the Minister responsible for cricket, who is nodding off—

Mrs. Helen Liddell (Monklands, East)

I am impressed by my hon. Friend's comments about the effect of the coastal trade in Scotland. Our Scottish heritage has a great impact on our tourist trade. Is it not ironic that many hon. Members on both sides of the House have been very attracted by the stories of the Vital Spark and the history of Scotland that is connected with the puffers? When we study the background to our coastal trade and the effect that this schedule could have on it, we realise that we are losing a vital part of our community, of our heritage and of what makes Scotland different—a vital part of our vital spark.

The Chairman

Order. This debate is about vehicle excise duty, which is not part of Scotland's heritage, or indeed that of any part of the United Kingdom.

Mr. Wilson

Mr. Deputy Speaker—

The Chairman

Order. I am the Chairman this evening.

Mr. Wilson

My hon. Friend the Member for Monklands, East (Mrs. Liddell) makes a vital point, Mr. Morris. Our national heritage has many dimensions. I contend that the economic well-being of island communities is a very important part.

The Chairman

Order. I am not denouncing that, but we are dealing with schedule 4 of the Finance Bill and heritage is not a part of that.

Mr. Wilson

I accept the fine distinction, Mr. Morris, but if there are no people on the islands, there is very little heritage. Dead communities are—

Hon. Members


The Chairman

May I help the hon. Gentleman? He obviously has important matters to raise on schedule 4 concerning vehicle excise duty. Perhaps he will deal with those rather than worrying too much about the dead.

Mr. Wilson

One of the major conditioning factors of the economic well-being of island communities is freight and transport costs, which is why we are talking about island communities.

Mr. Macdonald

Will my hon. Friend reflect on the principle which the Minister announced to us tonight, that taxation must be absolutely uniform throughout the length and breadth of the United Kingdom, and must apply to Lewis in the Hebrides as it does to Lewes in Sussex? Where does my hon. Friend think that that law—if it is a law—comes from? Does he agree that it is absurd to apply it to the Scottish islands?

Mr. Wilson

I agree entirely. It is not a law. If we were here long enough, and if you, Mr. Morris, allowed us to deviate far enough, we could give several examples of exceptions and anomalies that are allowed in recognition of geographical circumstances. I do not blame the Minister for what he said on the ground that he did not know what he was talking about. It was an ad hoc response.

Mr. Heathcoat-Amory

It was not ad hoc at all. I referred to vehicle taxation. If the hon. Member for Western Isles (Mr. MacDonald) wishes to quote me, he should get that correct.

Mr. Wilson

The Minister should do his homework even on that narrow point. He will then find that he is not right about that, either.

Mr. Salmond

The hon. Gentleman will be aware that a number of exemptions apply even to vehicle taxation. For example, police vehicles are exempt from vehicle taxation. [Interruption.] The hon. Member for East Lothian (Mr. Home Robertson) says that the lorries on the islands could be fitted with blue flashing lights, which would enable them to be exempt. Alternatively, they could be reclassified in some way. There is no uniform vehicle excise duty for police vehicles.

Mr. Wilson

There is no need to go as far as fitting vehicles with blue flashing lights.

My hon. Friend the Member for Renfrew, West and Inverclyde mentioned Caledonian MacBrayne. It is a dreadful confession from the Minister that he has no idea which vehicles commute between islands and mainland and which are fraudulently based on the mainland. It would not be difficult to check the returns of the ferry operators to find the activity pattern of each of those vehicles.

The Minister has consistently failed to say why he refuses to distinguish between fraudulent and legitimate operators. [Interruption.] Now he does not even have the courtesy to listen to the debate. Will he make some effort tonight to distinguish between those who operate fraudulently and those who operate legitimately, or are they all part of the same picture in the Tory book?

Mr. Skinner

My hon. Friend mentioned fact that the Minister had not the decency to listen to what he was saying. I suggest that he was not listening to my hon. Friend because the Tory Whips were in a huddle proposing that, despite the fact that my hon. Friend has been speaking for a relatively few minutes, they try to move a closure on this specific debate. The plan is that the Tory Whip will ask the Chair, Mr. Morris, to have a closure. It will be argued on the basis that, as there has been an important debate on the amendment beforehand, that time and this should be added together in order to gag my hon. Friend or anybody who follows him. That is the plan.

Mr. Wilson

I am always grateful for my hon. Friend's parliamentary insights. If that is the Government's ploy, I had better hurry on.

I wish to return to a serious point which the Government must answer. This debate has now been going on in correspondence with Ministers for about nine months. Why have they never sought to identify vehicles that are genuinely island-based? Why is the Tory party the party of legitimate fraud? Why have the Government allowed people to act fraudulently and advertise island licences when they know perfectly well that they are not island operators? Why have the Government done nothing about that? Why is their only solution based on a refusal to draw a distinction and therefore discriminate unfairly against the island operators?

The Minister has not made the slightest effort to answer any of those questions. I think that that is a discourtesy to the Committee—more than that, it is a disgrace—although it is a very minor discourtesy compared with the sleazebag activities of the hon. Member for Derby, North (Mr. Knight).

The Chairman

Order. I think that the hon. Gentleman might like to rephrase his earlier statement.

Mr. Skinner

He said "sleazebag activities"; he did not call him a "sleazebag".

The Chairman

Order. Will the hon. Member for Cunninghame, North rephrase his statement?

Mr. Wilson

I will use the phrase "grossly disreputable", Mr. Morris.

Mr. Graham

My hon. Friend will be aware that the vehicle excise duty will affect snow ploughs. There were blizzards in Scotland the other day and if snow ploughs are taxed to the hilt it will affect the lifeline to the islands. Will the roads be cleared or will Scotland suffer once again because the Government have not seen fit to recognise the difficulties of island living? Snow ploughs are essential to living on the islands and we must ensure that the roads are clear and free of snow. I ask my hon. Friend to consider that point in his deliberations on the schedule.

Mr. Wilson

I am grateful to my hon. Friend, although I do not want to get on to the subject of snow ploughs. Many hon. Members wish to speak in the debate tonight, and in light of the strictures of my hon. Friend the Member for Bolsover (Mr. Skinner), I will bring my remarks to a close.

Mr. Matthew Banks (Southport)


Mr. Wilson

I know that the hon. Gentleman wants to hear a bit more about the islands. I was going to ask him if there is any particular island that he would like me to dwell upon, but that might be a dangerous invitation.

Mr. Home Robertson

I am grateful to my hon. Friend for giving way. There is a lot of meat in the schedule. I think that paragraph 23, which refers to "false or misleading information", is particularly relevant to the position tonight. Sub-paragraph (3A) states: A person who, in supplying information or producing documents for the purposes of any regulations made under section 61A— (a)makes a statement which to his knowledge is false or in any material respect misleading or recklessly makes a statement which is false or in any material respect misleading … is guilty of an offence". Does it occur to my hon. Friend that the Minister, and more specifically the Government Whips, were "recklessly misleading" in their conduct in relation to an earlier amendment to the schedule? If people will be guilty in future of an offence under the terms of the schedule and subject to legal sanctions, why are Ministers not prepared to live up to those same standards?

Mr. Wilson

My hon. Friend makes his own point. I believe that the little things which happen in the Chamber have much greater reverberations outside it. The story of what happened earlier this evening will be told for months and years to come. In one fell swoop, the hon. Member for Derby, North wrote off any chance that the Tories had of winning back the marginal seat of Argyll and Bute. He has also made a significant contribution to doing in the hon. Member for St. Ives (Mr. Harris), and there may be an effect on other seats because many people who do not live on the islands are interested in them.

The Tories will pay for their actions earlier tonight in one way or another. They do not have the wit to realise it when the events are taking place—they think that everything can be stitched up in here. If they can cheat and deceive and use those sorts of tactics—

The Chairman

Order. Firstly, the hon. Gentleman is not talking to the schedule; and, secondly, I would be grateful if he would again rephrase the word that he used. Does he know which word I am referring to? The hon. Gentleman used the word "cheat", which is not appropriate.

Dr. Godman

How about "sleekit"?

Mr. Wilson

That is a very seasonal word. Would "sleekit" be all right, Mr. Morris? It is used in a well-known poem by Robert Burns as an adjective to describe vermin, so I will halfway compromise on it and we will bear in mind Bevan's famous maxim.

Rev. William McCrea

Does the hon. Gentleman agree that a strange philosophy is being advanced tonight? The Government, instead of taking action against people who act fraudulently, intend to put legitimate island operators out of business to solve the problem.

Mr. Wilson

I agree. That is something for which the Paymaster General should answer, but he refuses. The Government's philosophy is that it is easier to use a sledgehammer than to make sensible adjustments, to separate the wheat of legitimate island operators from the chaff of fraudulent operators who are abusing the system.

12.45 am
Dr. Godman

Does my hon. Friend agree that the sleekit behaviour of Ministers tonight may damage the interests of people who are attempting to bring some prosperity to remote communities? I refer to the importance of transport costs to fish farms in remote island communities. The measure could damage not just hauliers but fish farms and the employment that they offer.

Mr. Wilson

I could talk at length about fish farms but will not do so. The same argument applies to distilleries. Island economies are dependent on transport and transport costs. The Government are gratuitously heaping an additional cost on transport, which will affect the cost of everything else.

Mr. Home Robertson


Mr. Wilson

I will not accept any further interventions because I do not want to prolong my speech, and I do not want this debate to descend into farce. It is not a farcical matter, but a serious one. This speech is not a ploy. I am making it because I care passionately about the well-being of the islands and particularly of those in my constituency.

Even after seven years in the House, I was naive enough to believe that, if one argued a good non-political case—which in this instance concerns communities in my constituency that generally do not vote for me—one could win it, because virtually nothing is at stake. I was encouraged by the hon. Member for Salisbury (Mr. Key), who encouraged a good dialogue—but out of the blue, the whole thing was dashed in a most insulting way.

I am not sure whether the Minister acted alone or in a conspiracy with the hon. Member for Derby, North. They dealt with the matter in a way that I am not allowed by you, Mr. Morris, to describe. The judgment will out, and this debate will have its reverberations. Hell mend those responsible.

Mr. Macdonald

My hon. Friend said that Tory Members will pay for their activities this evening. They are already beginning to pay, because they could have been home a long time ago if their Whips had not scored an extraordinary own goal, trying to scupper the possibility of returning to this debate on a future occasion. They did not succeed in that either, because—

The Chairman

Order. I remind the hon. Gentleman that the Committee is debating schedule 4 stand part, not something that occurred earlier this evening.

Mr. Macdonald

I was reflecting, Sir Michael—

The Chairman

Order. I am not yet Sir Michael.

Mr. Macdonald

After this evening's activities, Mr. Morris, you deserve a knighthood.

I will not confine myself to the topic touched on earlier, because schedule 4 concerns many other relevant matters.

I cannot refrain from mentioning what the Minister described as the principle involved in not allowing the exemption for island vehicles. The schedule itself offers a simple way of resolving the problem, which is how to identify vehicles used only on the islands and not misused by being taken to the mainland. The Minister said that this could not be done because the Treasury does not make geographical or regional exceptions in the matter of vehicle taxation.

Part II of the schedule, paragraph 2(h), mentions vehicles used for short journeys between different parts of a person's land". Why not rephrase that to read "vehicles used for short journeys between different parts of an island"? That would offer a good definition of the sort of vehicles for which we are seeking an exemption. It does not refer to the Scottish islands, so it does not pose the regional problem that the Minister says goes against the Treasury grain.

Vehicles used for short journeys within islands could then be marked to ensure that they could not be taken to the mainland, thus putting an end to the abuses that the Minister is so keen to stamp out.

The Minister has been unable to give us a single statistic to show the extent of a problem with which he is clearly obsessed. He is willing to deal this heavy blow to fragile island communities in order to get rid of the problem, yet he has told us that he has no idea of how great the problem really is. That is quite extraordinary.

The Minister thought that the abuse was so considerable that he had to take action against island communities and ignore the work being done by the Department of Transport. We might have expected him to make an effort to ascertain the scale of the problem first: how many operators are abusing the exemption? How much money is being lost to the Treasury—thousands or tens of thousands of pounds?

The Minister has no answer to these questions, yet he is willing to detain us all here—

Mr. Home Robertson

My hon. Friend is being unfair to the Minister. Surely the Treasury must know how many vehicles are covered by the current exemption. By the simple process of calculating the difference between the discounted rate and the top rate, and multiplying by the number of vehicles covered by the exemption, even this Minister should be able to work out the answer. Is my hon. Friend telling us that the Minister and the Government do not even know that?

Mr. Macdonald

The Minister told us all earlier that he had no idea of the total number of vehicles claiming the exemption, or of the total revenue lost to the Treasury thereby. He could not even hazard a guess as to what proportion constitutes abuse. If he had an idea of the total number, he could have simply given us some kind of ceiling, above which the abuse could not be said to take place. He could say that the amount being lost because of the abuse was a certain figure below that amount, because there would be a total amount involved in terms of vehicles claiming the exemption.

I do not want to press that particular point with the Minister, but he must go back tomorrow morning and ask those who advise him in the Treasury how we came to be discussing the matter at this hour of the morning, when it could all have been settled and resolved with a little foresight and thought, a little consideration, a little bit of communication between his Department and the Department of Transport, which is currently considering the issue. Does he believe that the principle of uniform vehicle taxation throughout the United Kingdom is so important that it cannot be deviated from in this specific instance, which has the support of both sides of the Committee? Is it threatened at all as a principle by the exemptions that we propose?

I suggest that, if the Minister asked the civil servants to exercise a little bit of ingenuity and brain power, they would soon come up with a form of words that would achieve the purpose that hon. Members on both sides of the Committee wish to achieve, but which would also not break the principle that he so cherishes.

I would like to move away from that specific topic in case hon. Members believe that it is becoming exhausted, bearing in mind the strictures of the hon. Member for Bolsover about the two debates potentially being added together.

Mr. Home Robertson

Before my hon. Friend moves on from the Minister's cherished principle, I would like to clarify one point, because I studied very carefully the manifesto issued by the Conservative candidate in East Lothian at the last general election and I can assure my hon. Friend that nothing was in it about an undertaking to get to the root of the vicious problem of islanders freeloading on the mainlanders because of the exemption. Did the Conservative candidate in Western Isles promise in his manifesto to do away with the exemption?

The Chairman

Order. That has very little to do with schedule 4.

Mr. Macdonald

What my hon. Friend said is hardly surprising given that we could not believe what the Minister was apparently telling us a few seconds before the conclusion of the debate, and given the actions of his hon. Friends the Whips in undermining the commitment that he had apparently made to hon. Members about being able to return to the matter on Report.

Mr. Heathcoat-Amory

No undertaking has been undermined. I stand by the remarks that I made, which were that the House clearly wishes to return to the issue. It is most appropriately done later on Report. If there was any procedural difficulty about the matter being raised by the hon. Member for Argyll and Bute (Mrs. Michie), I would use the Government Benches to ensure that the matter was raised on Report. I gave that undertaking, but I also indicated, in response to a question, that I would be happy to meet the hon. Lady or other hon. Members to discuss it, because I have never refused to meet an hon. Member about an issue of public concern.

I am very happy to repeat those points for the benefit of the Committee. At this late hour, I do not think that it is very fruitful for me to continue to debate the issue with the hon. Gentleman, but in the light of the assurances that I have given, I hope that he will agree that it is my full intention—as it has always been—to return to the issue in due course.

Mr. Macdonald

That is a welcome announcement, which makes it all the more extraordinary that the Whips should have forced a Division in the first place. They have saved themselves no time tonight, nor have they precluded a subsequent return to the issue. This is the most self-defeating action that I have ever witnessed on the part of a Whip.

Mr. Skinner

I think that the Minister now appreciates the political significance of what the Government Whips have done tonight. The consequences could be very severe.

Does my hon. Friend agree that double standards are operating here? A Tory Minister says that it is wrong to have variation in relation to taxes for the islands, yet the Government are prepared to attack the Labour party when it talks about devolution because they say that it will put up taxes for Scotland. They cannot have it both ways; this really is hypocritical.

1 am

Mr. Macdonald

I thank my hon. Friend for reminding the Committee of that, but I should like to return to the Minister's offer. He said that the matter could—indeed, I think he said "would"—be returned to on Report following a meeting between the hon. Member for Argyll and Bute (Mrs. Michie) and other hon. Members.

Dr. Godman

In the light of the Minister's offer, may I ask my hon. Friend whether he believes that schedule 4, suitably amended, would meet the needs voiced by him and the hon. Member for Argyll and Bute?

Mr. Macdonald

I have not been a Member of Parliament as long as the Minister, but one thing that puzzles me is how the matter can be returned to on Report when a vote has already taken place.

The Chairman

Order. Let me make it clear that that decision rests entirely with Madam Speaker: there is no point in debating it now.

Mr. Macdonald

I am grateful for your clarification, Mr. Morris. It would be helpful to all hon. Members if the Minister suggested that, if a proposal emerges as a result of meetings that he held with the hon. Lady and others, the Government might be willing to consider tabling such an amendment on Report. I must consider the impact of schedule 4 on certain operators in my consituency: it is likely to drive them out of business. If the Minister suggested that the Government might table amendments as a result of meetings with hon. Members, that would relieve my constituents and, I am sure, many of his hon. Friends who are present tonight.

I remember a parallel case—almost—in last year's Finance Bill, involving the passenger tax. A similar principle was invoked then. It might have been more applicable then because some people were seeking regional exceptions. However, I do not see how the principle applies in this instance. It should be easy to find a simple way to define the matter in a manner that does not breach Treasury guidelines.

The matter is hugely important to my constituents because transport communications are crucial to the livelihood of people in the Scottish islands. Communities there are fragile and average incomes are considerably below the United Kingdom average. Car ownership is proportionately high precisely because communications in remote rural areas are impossible by any normal means of public transport and car ownership is a necessity. Any measure that increases the costs of transport to my consistituents and other island inhabitants strikes at the very root of those communities and their ability to survive.

I hope that when the Minister meets the hon. Lady and other hon. Members he will be open-minded, will look at the issues afresh, and will have requested a report from the Department of Transport. I hope that he will ask his Treasury officials to look as hard as they can for a means to achieve this exception.

Rev. Ian Paisley

I am glad that I waited until the end of this debate, because if what the Minister said had been said a little earlier, we would not have reached such an impasse. I am critical of what the Whips did but I shall look carefully at what the Minister does. He has said that he will use the Government's power to return the issue to the Floor of the House. Time will tell, but I accept that assurance. As I have said, if it had been given sooner and more fully we would not have reached the impasse.

Question put and agreed to.

Schedule 4, as amended, agreed to.

Bill (Clauses 2, 5, 8, 15, 52, 64 and 91, Schedules 1, 4, 11 and 14, and any new clauses first appearing on the Order Paper not later than 19 January and designed to continue the statutory effect of the Ways and Means Resolutions of the House of 13 December) as amended, to be reported.

To lie upon the Table.