Clause 11
Finance Bill
2:45 pm
Paul Goodman (Shadow Minister (Childcare), Treasury; Wycombe, Conservative)
I beg to move amendment No. 25, in clause 11, page 8, line 12, at end add—
‘(11) This section shall come into force on a day which the Treasury may by Order appoint.
(12) No order shall be made under subsection (11) unless the Treasury has compiled and laid before the House of Commons a report containing an assessment of the impact of vehicle excise duty on farming, agriculture and on rural areas.’.
I would like to make it clear at the start that this is a probing amendment. I have absolutely no intention of putting it to the vote. We have no wish to deprive the Treasury of the £625 million that this increase will raise over three years, and we could have raised the concerns that we are about to air in the clause stand part debate. I am also mindful that we will return to some of the concerns when we consider clause 105.
However, tabling and speaking to this amendment send a signal—which we believe is important, as I indicated in the last debate on amendment No. 1 on fuel duties—that we are concerned about some of the long and medium-term effects of the Government’s strategy on VED on farming and agriculture more widely, and on people living in rural areas. I want to explore some of those concerns in this debate. To do so, it is necessary for me to describe what appears to bethe Government’s strategy in relation to important elements of VED.
This year’s changes represent a cautious widening of the differences between the top and bottom bands in order to widen the differential between the most and least polluting vehicles. I note in passing that, as so often in this Budget, the Chancellor has tied the hands of his successor, as appeared to be the case with the last clause, and has spelled out three years of changes. Widening the differential between the most and least polluting vehicles is clearly sensible, and we will not oppose the clause in the stand part debate. We want emission levels from new cars in the UK to fall from around 170 g per kilometre to 100 g per kilometre by 2020, and by 2030 we want that figure to be an average for all cars on Britain’s roads. Our quality of life policy group, chaired by my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), is examining the means of achieving that aim, including VED, of course.
My right hon. Friend is also examining the effect of vehicle taxation on farming, agriculture and rural areas. A written answer from the Financial Secretary to my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice), the shadow Minister for Agriculture, points towards some of the effects. My hon. Friend asked what estimate the Treasury had made of how many band G vehicles, which are the most polluting, are expected to be affected by VED up to the year 2011. The Financial Secretary replied—I paraphrase—that approximately 227,000 vehicles are currently affected, representing the current stock in band G. Over the whole of 2007-08 that figure will rise to 310,000. In 2008-09 it will rise to 416,000, in 2009-10 to 605,000 and the following year to 740,000.
Will the Financial Secretary give us the figures for band A cars, so that we can see how successful that band is becoming? Perhaps that information can be passed to him. [Interruption.] My hon. Friend the Member for Fareham says that it is a very important consideration, so his answer will be very important.
Some of the band G vehicles will be Land Rover Discoveries and Toyota Land Cruisers that are registered and driven in urban areas and we are not—I repeat, not—making representations on their behalf. As time goes by, others will be sold on to farmers and agricultural workers and others who live in rural areas who consequently find themselves paying band G rates of VED. Some pick-ups used by farmers are also categorised as band G vehicles, although others are classified as light goods vehicles and thus qualify for lower VED.
When he replies to the debate, perhaps the Financial Secretary will tell us if he has an estimate of the proportion of those band G vehicles that will be used by farmers and agricultural workers in each year up to 2010-11, as the number is growing every year.