HL Deb 14 December 1978 vol 397 cc709-13

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether when the projected cancellation of the excise licence and the increased petrol tax come into force they would consider a system of "red" petrol (such as they used during the last war) which would be free of the increased petrol tax and could only be used in agricultural machinery or stationary engines which do not travel on the road.


My Lords, the noble Lord's suggestion will certainly be considered, but any relief of this kind would add considerably to the complication and expense of the excise duty structure and carry a serious risk of evasion of the proper duty on petrol for road fuel use.


My Lords, while thanking the noble Baroness for that Answer, I would ask her whether she does not agree that something must be done for those who use petrol and who, if the price is increased in this way, will receive no contrary advantage by way of the saving of the £50 excise licence? There are numbers of people in this country who use stationary engines which require petrol, and I would ask the noble Baroness whether Her Majesty's Government will consider what can be done for them.

Baroness BIRK

My Lords, as I understand it, most agricultural vehicles and machinery are powered by diesel fuel which, as the noble Lord knows, is dutied at a low rate. A number of reliefs are available, including relief on heavy oil used in horticulture and exemption from VED for agricultural machines. But I repeat that, because of the difficulties and costs of enforcement, it really would be impracticable to extend the relief to petrol. I recognise the noble Lord's point and sympathise with it, but it is difficult in a case like this for the results not to turn out a little harder on one minority group than on others.


My Lords, is the noble Baroness aware that, unless the new system is accompanied by a reduction in taxation or by allowing users to set off the cost of travel from their home to work as a tax allowance, it is going to inflict grave hardship on all those members of the community who do not live next door to where they have to work?

Baroness BIRK

That, my Lords, is an entirely different question and has nothing specifically to do with agriculture or "red" petrol.


My Lords, is it not the case that the real trouble is the high rate of taxation generally, including the tax on petrol? Would not this particular suggestion lead to a vast number of new regulations and new criminal offences, and are we not making too many regulations and creating too many criminal offences?

Baroness BIRK

My Lords, in doing away with VED we should be doing away with a whole section of administration and bureaucracy—something of which I should have thought the noble and learned Lord would approve. I am sure the noble and learned Lord will appreciate that the more exceptions one makes the more difficult it is to avoid the situation he envisaged. It is a very difficult point.


My Lords, while thanking my noble friend for the gracious way in which she always answers these difficult questions, may I ask her whether she appreciates that, unless some allowance is made in respect of engines used in agriculture, for windmills and on lonely farms, which bear no road tax, then, if the price of petrol is pushed up by X pence, they will have imposed a tax which hitherto did not exist? Consequently, some attention must be paid to the point made by the noble Lord on the other side of the House.

Baroness BIRK

Yes, my Lords, I very much appreciate what my noble friend has said and what noble Lords opposite have said. I said at the beginning of my original Answer that the noble Lord's suggestion will be considered; and I suggest that if noble Lords feel they would like to pursue this themselves, they should do so with the Excise Department. But I shall certainly make sure that all the comments which have been made are passed on to my right honourable friend.


My Lords, can the noble Baroness assure the House that there will be adequate opportunity for consultation, so that all the various and different interested parties to this proposal can put forward exactly the type of view put by my noble friend?

Baroness BIRK

My Lords, I understand that consultations are going on through the Department of Transport; and there will be an opportunity at some point for this to be discussed in Parliament.


My Lords, I hope that when the noble Baroness reports to her right honourable friend she will make it quite clear that I was far from endorsing the suggestion made by the noble Lord, Lord Swaythling, because otherwise she will get the wrong end of the stick.

Baroness BIRK

No, my Lords, I did appreciate that, and to make quite sure I will read it again in Hansard. I appreciated what the noble and learned Lord was saying.


My Lords, is the noble Baroness aware that the "red" petrol scheme worked perfectly well during the war and that it was quite easy to detect if people were using it when they should not be doing so? Therefore, why should not "red" petrol be used in this way?

Baroness BIRK

My Lords, as the noble Lord knows, the "red" petrol system which was used during the war was concerned not with taxation but with rationing, and it was enforced by police by means of roadside checks. The number of cars on the road has increased enormously and enforcement would require considerable extra manpower, which, again, would involve more public expenditure. Frankly, it is doubtful whether that would be acceptable to Parliament or to the general public.

Viscount ST. DAVIDS

My Lords, is the noble Baroness aware that in fact the categories of machine which use petrol but which do not go on the road are very much larger than has so far been mentioned? Among others which come immediately to mind are the family lawn-mower and the family boat.

Baroness BIRK

Yes, my Lords, I am aware of that, and have added them to the list of those already mentioned.


My Lords, is my noble friend aware that, as anybody who served in the Armed Forces during the last war knows, you can take "red" petrol without much difficulty and that even amateurs like myself can take the colour out?


My Lords, does the noble Baroness agree that, in terms of other tools using petroleum, there are in agriculture, horticulture and forestry a number of power tools in use and the cost of petrol now proves to be a very severe burden?

Baroness BIRK

Yes, my Lords, we are aware of that. It is a question of trying to get a balance between the various costs on either side. I appreciate this and, as I have said, I will pass on all the points that have been raised.

A noble Lord

My Lords, will the noble Baroness not agree that—


My Lords, I think that I have the House with me in saying that we should move on.

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