§ Mrs. MayTo ask the Secretary of State for Transport what extra revenue has accrued for each year since 1997; and what he estimates the projected extra revenue will be for the next 10 years, as a result of freezing the threshold of vehicle excise duty exemption for classic cars at the year 1973, compared with the rolling 25-year exemption previously in operation. [158218]
§ Mr. DarlingSince 1997 the Government have sought to restructure Vehicle Excise Duty so that it reflects the environmental impacts of vehicles. This is in keeping with the Government's aim to ensure that the UK meets its legally binding Kyoto targets for the reduction of carbon emissions. The rolling 25-year exemption was abolished in 1998 because it was inconsistent with this environmental focus.
Currently the VED exemption in respect of all vehicles registered before 1 January 1973 costs the Exchequer over £40 million per annum. If the rolling 25-year VED exemption for cars had continued to the present day, the additional costs to the Exchequer in terms of revenue foregone would have been close to £9 million in 2003–04 alone. The total additional cost since 1997 would have been a little over £20 million. Precise figures would require detailed analysis of vehicle stock data, including engine sizes of all extant 25 to 30-year-old vehicles. Future revenue implications will depend on vehicle ownership and use patterns, and in particular on how quickly older vehicles are scrapped.