Public Accounts

Part of the debate – in the House of Commons at 7:49 pm on 24th October 1985.

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Photo of Mr Roger King Mr Roger King , Birmingham, Northfield 7:49 pm, 24th October 1985

I shall confine myself to the 13th report of the PAC concerning the evasion and enforcement of vehicle excise duty. The Committee underlined the fact that circumstances up to 1982–83 were far from satisfactory. The report notes that between £135 million and £174 million of revenue is lost by people not carrying out their duty to license their road. vehicles. It identifies the fact that, out of some 28 million vehicles that are in use or have been built in this country, 20 million are licensed, but 8 million are unaccounted for. The report states that most of the unaccounted for vehicles are laid up, awaiting sale or are not licensed but are being used regularly. This emphasises the unacceptability of the present situation.

The police make an effort to apprehend licence dodgers, but we have seen recently how difficult it is for the police to do that job adequately. We learnt a bitter lesson in Handsworth, where I believe the riot was started by a spot check on a vehicle that was not displaying a tax disc. Conversations that I have had with police officers suggest that they are hesitant about dealing with tax dodging within the inner city areas, for fear of starting something much more substantial in the form of civil disobedience. If the police are not prepared to do that, there are grounds for having a commissioned debt collecting agency, as there is a large amount of money for a private enterprise agency to collect on behalf of Her Majesty's Government.

There was no shortage of ideas about how to combat the present situation, and there are two or three basic alternatives. One idea was to pass the tax on to the user in petrol prices, to make sure that everybody who used a car paid the equivalent of the vehicle excise duty. That would mean an increase of 31p per gallon on the price of petrol. The Government ruled that out because it would disadvantage many people in rural areas who do much higher mileage in daily commuting to schools, shops and so on.

Another alternative was to tax every vehicle, irrespective of whether it was used or laid up. That would be a much more simplified form of vehicle excise duty, but it was dismissed because it would be unfair on those who collect cars as a hobby, run museums or rarely use vehicles on the public highway. Surely a combination of alternatives can be arrived at to come up with an acceptable policy.

I am disappointed in the report because no active suggestion is made to help the Secretary of State for Transport develop an alternative strategy. Non-payment of the vehicle excise duty is not a declining problem, but is gradually increasing, and it is becoming increasingly difficult to enforce licensing in our inner city areas. It seems to me that we could evolve a system that would feature all the suggestions that have been made. It makes sense to have some form of road pricing by passing some of the vehicle excise duty cost on to a gallon of petrol. A petrol increase of 15p per gallon is small compared with how much petrol has gone up in the past two years—approximately 40p to 50p. That would be paid by everybody who uses a motor vehicle.

It is equally possible to have a standing charge for a car, much as we have a standing charge for electricity, gas and telephone. A standing charge for a vehicle would not be unreasonable.

There could be a standing charge of not more than £2 a month— about £20 a year— for the opportunity of having a vehicle to use on the highway. Were one to apply for a full vehicle excise licence, that would be at a cost of about £40 or £50 a year, bearing in mind the extra cost of petrol and the standing charge that would be paid.