Clause 23 - Rates of vehicle excise duty

Finance Bill – in a Public Bill Committee at 11:00 am on 16 January 2024.

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

Photo of Gareth Davies Gareth Davies The Exchequer Secretary

Clause 23 makes changes to uprate vehicle excise duty for cars, vans and motorcycles in line with the retail prices index from 1 April 2024. Vehicle excise duty is paid on vehicle ownership, and rates chargeable are dependent on various factors, including vehicle type, date of first registration and carbon emissions data. The Government have uprated vehicle excise duty for cars, vans and motorcycles in line with RPI every year since 2010, which means that rates have remained unchanged in real terms during that time.

The standard rate of VED for cars registered since 1 April 2017 will increase by £10. The rates for vans will increase by no more than £20, and motorcyclists will see an increase of no more than £6. The changes outlined will maintain revenue sustainability by ensuring that motorists continue to make a fair contribution to our public finances.

Photo of James Murray James Murray Shadow Financial Secretary (Treasury)

Clause 23 provides for changes to certain rates of vehicle excise duty by amending schedule 1 to the Vehicle Excise and Registration Act 1994. We understand that the changes to rates will take effect for vehicle licences taken out on or after 1 April this year. We understand that the rates of vehicle excise duty for light passenger and light goods vehicles and motorcycles will increase in line with inflation, as has been the case since 2010. We have no questions on the clause.

Photo of Gareth Davies Gareth Davies The Exchequer Secretary

I am grateful to the Opposition for their position and understanding.

Question put and agreed to.

Clause 23 accordingly ordered to stand part of the Bill.