Clause 18 - Motorcycles (and motorcycle trade licences): rates of duty
Finance Bill
10:30 am
Mr Paul Boateng (Financial Secretary, HM Treasury; Brent South, Labour)
The purpose of the clause is to reform the structure of vehicle excise duty for motorcycles better to reflect the benefits that motorcycles offer, particularly where they substitute for cars. It contains a new structure of four tax rates based on engine size, which reflects the outcome of a major public consultation. I am sure that there is not a member of the Committee who has not received correspondence in the course of the past year on that issue, which excited a great deal of attention, particularly in the specialist press.
At the time of last autumn's pre-Budget report, the Government published a consultation document on the objectives of the new motorcycle VED system and the structure that would best achieve them. The consultation document attracted more than 12,000 responses, and in creating the new structure set out in the clause we have listened to the respondents. Motorcycle groups have warmly welcomed the new VED structure. One of the main motorcycle publications, ''Motor Cycle Fleet News'', said:
''We'll buy you a pint Gordon.''
It is all heart, and no doubt the pint would be from a small brewer, although I do not want to excite the interest of Opposition Members on that issue.
On the basis of those responses, we are proposing a new structure of motorcycle VED that not only reflects changes to the structure of the motorcycle fleet, but seeks to encourage smaller motorcycles, which bring congestion and climate-change benefits when used in place of cars. Under the new structure, there will be four tax bands based on engine size rather than the existing three bands. For many motorcyclists, rates of duty will fall by as much as £35, reflecting the principle that vehicle taxation should reflect use and environmental impacts rather than ownership. In total, some 600,000 motorcyclists will pay less duty under the new system.