Orders of the Day — Car Tax (Abolition) Bill

Part of the debate – in the House of Commons at 8:06 pm on 25th November 1992.

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Photo of Mr Peter Griffiths Mr Peter Griffiths , Portsmouth North 8:06 pm, 25th November 1992

I welcome the measure. We all take pleasure in the abolition of a tax. I understand the point made by the right hon. Member for Berwick-upon-Tweed (Mr. Beith) about the way in which this tax might be recouped in the coming months. His point about company vehicles very much echoes the representations that many hon. Members received only today from Transport 2000, the environmental group. I trust that the Government will seriously consider the impact of their decision on how they choose to recoup their lost revenue.

I hope that the Minister can give us an assurance about the price of new vehicles. We no longer have a special car tax; there will therefore be a consequential decrease in VAT. Should not the price of new vehicles manufactured within the European Community, either in this country or on the continent, be the same, wherever one happens to purchase a new car? The argument about the complications of the British taxation system leading to price differentials will no longer wash. Differences in the rates of exchange mean that, from time to time, there will be differences in the nominal price of vehicles, but that does not alter the real cost of a car. I hope that the Minister will be able to reassure us that there will be an end to customers being pushed into importing their cars in order to take advantage of lower prices for similar vehicles, particularly in Belgium.That will encourage people to return to British car showrooms.

This measure, by itself, will not regenerate the motor car industry, but it is a step in the right direction. I trust that the House will respond enthusiastically to this measure and that it will encourage the Minister to look for other ways to reduce the tax burden. With a request that he examine closely the way in which the revenue will be recouped and for an assurance of equal prices across our open frontier market, I welcome the Bill.