Clause 94 - VAT: children's car seats

Finance Bill – in a Public Bill Committee at 11:45 am on 8th May 2001.

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Question proposed, That the clause stand part of the bill.

Photo of Richard Ottaway Richard Ottaway Shadow Spokesperson (Treasury)

May I make a serious point before my right hon. Friend the Member for Fylde, who has several points to make, catches your eye, Dr. Clark? [Interruption.] Does the Paymaster General wish to defer the discussion? If she does, no doubt she will let me know.

Paragraph 13 of the explanatory notes rightly states that the EC sixth VAT directive permits member states to apply a reduced rate of VAT to children's car seats. What is significant about the clause is that it does not include the Chancellor's much-heralded proposal for a 5 per cent. rate on the repair of churches. The pre-Budget report trumpeted the fact that VAT would be reduced to 5 per cent. on church renovations.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

May I seek clarification, Dr. Clark? I thought that we were considering clause 94, which is about children's car seats.

Photo of Richard Ottaway Richard Ottaway Shadow Spokesperson (Treasury)

We are also talking about the EC sixth VAT directive, which is referred to in paragraph 13 of the explanatory notes on clause 94. The Government's much heralded proposal to include church repairs in the Bill has not been made because they have fallen foul of that directive. It is inappropriate for the Chancellor to tell spin-like stories when he has not cleared the proposal with the EC. He made claims that he could not deliver. It is a classic case of the Government being all spin and no delivery. [Interruption.]

Photo of Dr Michael Clark Dr Michael Clark Conservative, Rayleigh

Order. I believe that the hon. Gentleman was just in order, which is why I allowed him to continue. He was right to stay in order for a minimum period, rather than trying to stay in order for a long time, which might have stretched the patience of the Chair. We are talking principally about VAT on children's car seats, but as the hon. Gentleman said, the clause refers to the 5 per cent. reduced rate, in the context of which he referred to churches. We shall now try to return to VAT on children's car seats.

Photo of Michael Jack Michael Jack Conservative, Fylde

Lest my criticism of the clause be misrepresented or selectively quoted outside the Committee Room, let me say at the outset that I am in favour of any measures that attempt to reduce child casualties and fatalities. If clause 94 contributes to the saving of one life that otherwise might have been taken as a result of a road vehicle accident, it will have had the right and proper effect.

I wish to examine the Government's motives for making the VAT change. I am sure that all right hon. and hon. Members know about extremely worthy causes for which value added tax should be changed. For example, along with other local Members of Parliament, I recently attended a discussion with people who were visually impaired. They asked whether there could be a lower rate of value added tax on a range of products that are of assistance to them. Those who represented the Government at that meeting explained why that was not possible. One could give other examples.

Paragraph 5.100 on page 100 of the ``Financial Statement and Budget Report'' states:

``Around 6,000 children under eight years old are killed or injured each year on Britain's roads.''

Perhaps that statement underpins some of the thinking behind clause 94. The report continues:

``It is vital that child car seats are correctly fitted'' and then makes some other observations. However, no connection is made with the Government's assertion in justifying clause 94 that in some way the position of a substantial number of those 6,000 children is affected by car seats.

I undertook some research on the subject. I pay tribute to the transport statistics section of the Department of the Environment, Transport and the Regions. I asked what data was collected to measure the impact of child car seats on the road casualty figure and how we might know whether the £5 million a year that the measure will cost is the right way to affect the number of child fatalities. I was told that no data is collected on that matter. I probed a bit further and tried to focus on cars. What do we know about cars? For example, is any data collected to establish whether front-seat or back-seat passengers are affected? General data is collected about where people sit, but it does not reveal anything about the car seat itself.

I began to wonder whether the clause was an attempt to improve the quality of child car seats. It attempts to define a child's car seat, but nothing in it differentiates between the good and the bad. In effect, the Government could unwittingly spend £5 million on value added tax reductions on children's car seats on the basis that they are the root cause of saving children's lives, but poorer quality seats would benefit as opposed to better quality ones.

What accounts for child fatalities? According to the transport statistics from DETR

``Child pedestrian fatalities account for half of all child casualties, making this the biggest child safety issue.''

Clause 94 is a well-meaning attempt to improve the safety of children in motor vehicles but, for whatever reason, the Government have driven straight past the biggest single cause of child deaths. How would we, as Members of Parliament, explain to the parents of a child who has been injured in a pedestrian incident the non-use of the £5 million that the measure costs? That money might have been used to develop strategies for child safety that might have had a beneficial effect.

To that end, I examined whether we could justify spending money in that area. In 1990, the Department of Transport produced an interesting document entitled ``Children and Roads—A Safer Way''. It described the scale and nature of child road accidents and set out a strategy to deal with them. It focused on the question of child pedestrians, pointing out evidence that properly funded education to help children develop better strategies to deal with pedestrian safety had a greater effect on child safety matters.

To justify the clause, the Treasury must produce solid facts showing that the use of the £5 million is the best way of dealing with child safety matters. I see no statistical evidence from the DETR that that would help. If a child is involved in a fatal car incident, it is because a car has got into a fatal situation not because there is something wrong with the child safety seat. The Government have produced no evidence that the money might be better directed towards car safety issues. The Government's intention was, on this occasion, well meaning but it is not backed up by any facts from the DETR and it ignores children as pedestrians, which is the situation in which the most child casualties and fatalities are caused.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury) 12:00 pm, 8th May 2001

I presume that it would not be in order for me to answer the question of the hon. Member for Croydon, South (Mr. Ottaway) on annex H of the sixth VAT directive. I will say merely that representations on churches have been and continue to be made to the commission, which is reviewing the sixth directive in January 2003. The Chancellor took the view that a grant scheme would fulfil his commitment to assist churches and places of worship that came within the criteria, while continuing to press the commission to speed up its review before 2003. The grant arrangements are wholly in order and widely welcomed.

The hon. Gentleman introduced a sour note into what has been a good discussion. I am sure that he is not suggesting that the Government should withdraw the grant scheme to the churches and wait instead for the commission's view.

Photo of Richard Ottaway Richard Ottaway Shadow Spokesperson (Treasury)

Perish the thought that I should be considered sour. It was a legitimate point to raise. On a point that will come out in the next clause, it would be helpful if the Minister could tell us whether grants given instead of a VAT rebate are treated as public expenditure? The arrangements have been made accordingly.

My right hon. Friend the Member for Fylde touched on an issue about which every member of the Committee would be concerned: road deaths, not just of children but of many other individuals. He also raised the point of the many different ways in which we should approach reducing unnecessary deaths—although I consider all road deaths unnecessary. As the right hon. Gentleman has pointed out, cars can be involved in fatal crashes in a wide variety of circumstances. I think that he also raised the issue on Second Reading, when I explained that more than 1,000 children were killed or seriously injured while travelling in a car in 1999. Those figures came from the 1999 ``Road Accident Statistics Great Britain—The Casualty Report'', which I am told was compiled by the Department of the Environment, Transport and the Regions and the Office for National Statistics.

A particular issue is the use of appropriate safety restraints in cars. Clearly, the latest safety standards are always the most advanced and therefore the best. As the right hon. Gentleman will know, the standards are appropriate to the age, weight and height of the child. Such restraints can be expensive, so the Government took the view that there could be a reduction of up to £15 on the newer more expensive brands of seats. That is an extremely important contribution to assisting parents who, because of cost, use second-hand older seats and restraints, which are harder to install and not always the safest.

The right hon. Gentleman may have preferred the money that is to be used for the measure to be spent in other areas, but the Government believe that the incentive is correct. It is a relatively small amount, and safety is of great concern to us. The incentive forms part of a valuable set of measures also contained in the Budget to assist families with children, particularly small children. On that basis, we proposed a modest but important measure.

As the right hon. Gentleman knows, we could not reduce the VAT charge to zero. The lowest level to which we can now go is 5 per cent., and we have used that option. Although I am grateful—believe it or not—for his comments, I hope that he will accept that the Government's decisions are based on the information that we had. The measure's cost is modest, but it will contribute to child safety.

Photo of Michael Jack Michael Jack Conservative, Fylde

I am grateful to the Paymaster General for the careful and considered way in which she has responded to my observations, but the facts speak for themselves. According to the source of data from which she quoted, there was one child fatality in a car in 1999 in the age range 0 to one year. At the age of one, there were six fatalities; at age two, there were three; at age three, there were eight; at age four, there were three; and at age five, there were two fatalities. Thankfully, such fatalities in cars are very low.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

The right hon. Gentleman will know that car seats are compulsory for under-threes when they are carried in the front of a vehicle. We seek to address the use for children up to 11 in all parts of the vehicle, but how can we put a price on a child's life? If the use of the relief saved one child's life, I would consider that to have been a good investment.

Photo of Michael Jack Michael Jack Conservative, Fylde

I am grateful that the Paymaster General has repeated the second sentence that I uttered in this debate, because it is difficult to adjudicate in such matters where lives are saved. I ask those at the Treasury, when they have a moment to reflect, to re-examine the study by the Transport Research Laboratory in evaluating work undertaken by the universities of Strathclyde and Edinburgh into methods for training young children in pedestrian skills. They will see that, for a small sum of money, a disproportionate gain in the number of young lives that are saved can be achieved. Should there be a Division on clause 94, I will not vote against it. However, what is the best way of spending the money? As child pedestrian safety is not touched by the clause, perhaps the Government will address that in the future.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

The right hon. Gentleman will know that, in many parts of the country, life skills training projects are targeted at the age range to which he referred. They cover safety not only on the road, but in the home and around railway stations and tracks. He will welcome the fact that the Government will make £10 million available during the next five years, specifically to address child pedestrians and how to increase safety by using training and play situations in controlled environments to impress on young people the need to be safe. I hope that he will accept that the clause sits with several other issues that the Government are taking and will continue to take forward.

Question put and agreed to.

Clause 94 ordered to stand part of the Bill.

Photo of Graham Allen Graham Allen Vice-Chamberlain (HM Household)

I beg to move, That further consideration be adjourned.

This might be a useful moment to request an adjournment until this afternoon and to inform all Committee members that, should events outside take the expected turn, we would like to convene the Programming Sub-Committee at a time convenient to all members, including yourself, Dr. Clark, and the other Chairmen.

Photo of Dr Michael Clark Dr Michael Clark Conservative, Rayleigh

Thank you, Mr. Allen. We are doing well, and there is every likelihood that the Committee will be concluded by 7 pm on Thursday 24 May as set out in the programme motion.

Photo of Peter Luff Peter Luff Opposition Whip (Commons)

How will we know where the Programming Sub-Committee will meet?

Photo of Dr Michael Clark Dr Michael Clark Conservative, Rayleigh

As I understand it, the Programming Sub-Committee will meet in this room at a time convenient for us all. That will probably be 4.20 this afternoon.

Photo of Dr Michael Clark Dr Michael Clark Conservative, Rayleigh

Those of us who are involved will be here at 4.20 pm and, if there is not a Committee, we will do nothing for 10 minutes until the Committee sits at 4.30 pm.

Question put and agreed to.

Adjourned accordingly at thirteen minutes past Twelve o'clock till this day at half-past Four o'clock.