Orders of the Day — Car Tax (Abolition) Bill

Part of the debate – in the House of Commons at 7:30 pm on 25th November 1992.

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Photo of Mr Anthony Nelson Mr Anthony Nelson , Chichester 7:30 pm, 25th November 1992

I beg to move, That the Bill be now read a Second time.

The Bill implements one of the principal measures announced by my right hon. Friend the Chancellor of the Exchequer in his autumn statement—the abolition of car tax.

The Bill continues and completes a measure of tax reform that was begun in the Budget this year, when car tax was reduced from 10 to 5 per cent. It does away with another tax. It will rebalance the taxation of motoring away from the taxation of purchase towards taxation of ownership and use. It ends the discrimination against cars in the indirect tax system whereby previously they alone —apart from the traditional high excise duty goods—were singled out for additional tax on top of value added tax. It will enable the trade to reduce the price of a new car by about 4 per cent., saving the customer about £400 on a typical small family saloon costing about £10,000.

The Bill will help boost the motor industry, and it has been widely welcomed in the industry. It provides a reform that it has long sought. It will benefit business generally, as about half of new cars are bought by businesses.