§ Mr. Marland
asked the Minister of Transport whether he will make a statement on his review of vehicle excise duty.
§ Mr. Fowler
The Government's review of the operation of vehicle excise duty which I announced on 25 May has now been completed.
We have carefully considered the arguments for and against abolishing excise duty on petrol-driven vehicles and replacing it by increased petrol taxation. But we have concluded that the case is not sufficiently strong to justify this major change. We were particularly concerned that abolition would place too big a share of the burden of motoring taxation on high mileage rural motorists and essential business users. Over £100 million a year could have been added to business costs.
The review has, however, shown that the administration of the duty can be improved. It has already been possible, over the past 12 months, to save 400 staff and we have now identified further savings of over 1,000 staff. These will involve post offices handling more licensing work than they do at present. Details are being negotiated with the Post Office and will be announced in due course. I am about to start discussions with the staff side on this.
I am also investigating changing the minimum licensing period from four to six months and introducing a stamp savings scheme. I shall be consulting interested organisations about this immediately.833W
I am determined that evasion should be tackled more effectively. I propose to increase the enforcement effort and I am considering new methods, including intensive enforcement campaigns in selected areas. For the longer term we are also studying the possibility of a tax on possession.
Overall, these changes will lead to a reduction in administrative costs and staff. They will also give motorists generally a more convenient service than they now have.