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29 Apr 2008 : Column 246

Such destinations are sited in parts of Scotland where the economy is very fragile. I fear that the unintended consequence of the fact that the Government did not consider the people employed in Scotland’s winter sports sector will be that those people’s lives are made harder.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): My constituency has two of Scotland’s ski resorts, and I want to emphasise how important they are when it comes to bringing in money at different times of the year. The changing climate has added extra burdens on those who try to run the resorts, and they do not need the Government to add any extra costs at a time when they are worried about making decisions on serious investment priorities.

Stewart Hosie: The hon. Gentleman is right, and two separate costs are involved here. The first is the cost to the businesses, which are often marginal: for instance, although they have had a very good season this year, one of them may still not have made any money. However, the second cost is borne by the people who work as ski lift operators in the winter and who become forest and agricultural rangers in the summer. They are tiny in number, but essential to the sector, and I hope that the Minister will say something about them.

The final group that I would like to mention comprises those involved in mountain rescue. Some 500 vehicles in Scotland are used for mountain rescue. Mountain rescue teams are concerned about vehicle excise duty on the vehicles that they, and their many volunteer members, use to get up the hill to commence a rescue. The example of mountain rescue opens up two interesting points. The mountain rescue commission for Scotland has told me that 4x4 vehicles used as ambulances are already fully exempt from VED, so there can be no argument that this cannot be done. I also understand that the Treasury has been in negotiations with the UK body representing the commission since late last summer, and that the discussions—I hope that the Minister can confirm this—may be about exempting all mountain rescue vehicles from VED.

We have small numbers of people in fragile economies earning low agricultural-level wages. We are absolutely not arguing that price should not be used as an incentive for behavioural change—we believe on balance that it should. However, in terms of the implementation of this measure, the impact on some of the poorest-paid people in the most fragile economies and key sectors could be damaging. I very much look forward to hearing what the Minister has to say, Sir Nicholas—I hope that I spared your blushes earlier—and shall decide after that whether to press my amendment to the vote.

Rob Marris: It is a pleasure to appear before you, Sir Nicholas.

I have some sympathy with the points made as lucidly as ever by the hon. Member for Dundee, East (Stewart Hosie), who takes a great interest in Finance Bills generally and issues affecting Scotland in particular. I am sure that the Minister will be able to reassure me with her answer, but I will be interested to hear it.

I have to say that I have a bit less sympathy with amendment No. 6. Is it in order to address some remarks to that, Sir Nicholas, or should I wait?


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The Temporary Chairman: Wait.

Rob Marris: I should wait.

I want to talk generally about CO2 emissions, because that is related to the whole issue. First, I should like to correct some of the figures given by the hon. Member for Taunton (Mr. Browne) on household emissions versus vehicle emissions. I see that you are looking concerned, Sir Nicholas. Please tell me—I am sure that you will—if you think that I am straying too far.

The Temporary Chairman: We are debating amendments Nos. 9 and 10, and a separate debate on amendment No. 6 will come later. The Chair is always flexible, and if the hon. Gentleman gives an undertaking that he will not speak on amendment No. 6, perhaps we can allow him to digress slightly in respect of his remarks on amendments Nos. 9 and 10.

Rob Marris: I am grateful to you for that guidance, Sir Nicholas, as ever. I am not sure whether my remarks would be better addressed to these amendments or to amendment No. 6, so perhaps I will seek to catch your eye later when we move on to amendment No. 6.

Mr. Alan Reid (Argyll and Bute) (LD): The hon. Member for Dundee, East (Stewart Hosie) is right. The economies in the remote parts of the United Kingdom are suffering greatly and are very fragile. Many of the businesses in those areas—farming, crofting, forestry and so on—need vehicles that can go off road, and often the same vehicle is used for business purposes as for going into the village. Those businesses therefore need a reduced rate of VED.

I am sympathetic to the amendment, but on the condition that the regulations to which it refers would have to be very tightly drawn to ensure that they were not abused. We would not, for example, want company cars, or even the First Minister’s car, to be defined as working vehicles. The regulations would have to apply only in a rural situation and only to cars that are essential to the running of a rural business.

It is not a question of creating a precedent. The hon. Gentleman already referred to existing precedents: police cars and cars used in the health service are exempt, as well as many others. There is a long list of exemptions already, and I urge the Government to accept the amendment so that there can be consultation on the regulations. Regulations should be drawn up that allow the reduced rate to be applied to vehicles that are essential to the operation of a small rural business. I hope that the Government will be sympathetic to rural business by accepting the amendment.

The Temporary Chairman: I call Mr. Jeremy Browne.

Mr. Jeremy Browne: Thank you for calling me, Sir Nicholas. I was caught slightly on my heels by the very brief speech by the hon. Member for Wolverhampton, South-West (Rob Marris) a moment ago.

My party proposed differentials in vehicle excise duty to reflect the emissions from cars in advance of the legislation being introduced in 2001, and it remains our position that it is reasonable to persuade people of the merits of driving more fuel-efficient and energy-efficient
29 Apr 2008 : Column 248
vehicles by creating a differential in the vehicle excise duty that they pay. We are not, therefore, seeking to dispute that principle, but we are sympathetic to the amendment tabled by the hon. Member for Dundee, East (Stewart Hosie) for the reasons already outlined in previous speeches. Those in remote rural or agricultural settings do not find it practical to go about the business of running a profitable organisation using low-emission cars because such vehicles are not able to cover muddy terrain or pull sufficient weight, which farmers, for example, need to do to perform tasks in order to complete their duties.

Mr. Mike Weir (Angus) (SNP): I have listened to what the hon. Gentleman says, and I accept his point about the principle of VED differential for carbon emissions. However, another principle is important: we should take into account the needs of rural and remote areas. If we do not do so, we will undermine the effort to get everyone to sign up to meeting climate change targets. Despite the principle concerning emissions, the hon. Gentleman is right. We agree with his point, which was also made by my hon. Friend the Member for Dundee, East (Stewart Hosie).

Mr. Browne: I agree with the hon. Gentleman and I was not seeking to imply anything else.

I represent a constituency in Somerset. That is a long way from Scotland, but it has remote rural areas, including parts of Exmoor national park. I observe that the use of expressions such as “Chelsea tractor” give a quite urban perspective on the debate about fuel emissions and vehicle excise duty. I understand the frustration that people have in many towns and cities, which were built and designed before the invention of the car—certainly before the invention of very large cars. It is difficult to manoeuvre one’s way along small roads in this country using large 4x4 vehicles, and doing so may have an impact on other road users and pedestrians.

There are concerns about the practicality of using 4x4s in urban settings, but the overall context, of course, is concern about emissions and global warming created by transport—particularly private transport. My party and most people in this House are sympathetic to the case for differentials in vehicle excise duty in that context. We must then consider the exemptions that we put in place to help people who find themselves in exceptional circumstances.

John Thurso: Is not the key principle that when one is seeking to change behaviour, there has to be another pattern of behaviour to change to? If there is no alternative, all one is doing is punishing. The point is that there is no alternative in remote rural areas.

Mr. Browne: As always, that point was extremely well put by my hon. Friend. It is difficult to get about a farm in a Nissan Micra in January, and anyone who attempted to do so would not be running a very successful farming enterprise. There are circumstances, to which I referred earlier, where it is necessary to have a vehicle that can pull more weight or operate on more unsympathetic terrain. That is most obviously the case for farming but other examples, such as forestry, have been given.


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9 pm

Let me inject a note of reservation into our deliberations. The amendment is widely drawn, and some will be concerned that it does not include a definition of a working vehicle, but leaves that to the Treasury. The hon. Member for Argyll and Bute (Mr. Reid) said that some people may believe that the First Minister is transported in a working vehicle but others may be less sympathetic to that view.

Stewart Hosie rose—

Mr. Angus MacNeil (Na h-Eileanan an Iar) (SNP) rose—

Mr. Browne: I shall give way first to the hon. Member for Dundee, East.

Stewart Hosie: The definition of a working vehicle has been left to the Treasury to ensure that it is not too widely drawn, not least because the Treasury will want to maximise the revenue yield. I am sure that it will be sympathetic enough to draw it sufficiently widely to cover those who will be affected by the changes.

Mr. Browne: I shall take the intervention of the hon. Member for Na h-Eileanan an Iar (Mr. MacNeil) before moving on.

Mr. MacNeil: I am grateful to the hon. Gentleman. Surely the definition of a working vehicle is a 4x4 or a pick-up that does a job that a Nissan Micra could not do. As a crofter, I know of umpteen situations on a farm in which something with a bit of guts and bigger wheels is needed to do something that a Nissan Micra could not do. Many of my neighbours are crofters and, like me, use vehicles to do things that a Nissan Micra clearly cannot do. That is one basis for a definition.

Mr. Browne: I made that point earlier. However, we must be careful that the exemptions are not too wide. Let us consider a famous Scotsman, David Coulthard—I note that he chooses not to pay tax in Scotland. He drives a vehicle that is essential for his task. If he drove a Nissan Micra, he would be less successful in his occupation.

John Thurso: It depends on the engine.

Mr. Browne: Indeed. It would have to be an extremely souped-up engine. Nevertheless, I am not sure that the exemption should apply in that case.

Mr. MacNeil: The point is that the job that what is known as a Chelsea tractor does in Chelsea could be done by a Nissan Micra.

Mr. Browne: Indeed, I agree with the hon. Gentleman. His demeanour suggests that we are at odds, but that is not the case. We all agree on the need for differentials in vehicle excise duty to try to influence behaviour and that, in some circumstances, when there is no alternative—the best example is in a rural setting on a farm—an exemption is necessary. The only point of controversy or dissent that I make is that the exemption should not
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be too widely drawn. The amendment cannot satisfy us that that would be the case because it leaves the matter open.

The Liberal Democrats agree with the principle of the amendment and are sympathetic to the concerns of people throughout the United Kingdom who are in the circumstances that have been outlined. We therefore intend to support it.

Rob Marris: The hon. Gentleman is right about the difficulty with definitions. I do not know whether it is an urban myth, but it is said that, before the introduction of the October congestion charge changes in London, there has been a huge increase in expensive cars being registered as mini cabs. Those definitional problems are difficult to solve.

Mr. Browne: There is a danger of widening the debate too far, but the hon. Gentleman makes a reasonable point. If I were a Treasury Minister, I would always be wary of creating exemptions because they may cover many categories that one did not envisage.

I fear that Scottish National party Members appear to be rather resentful that we are supporting them. [Interruption.] They had hoped to be in splendid isolation—the press releases had already been written and will now have to be rewritten, based on my comments. I have disappointed the hon. Member for Na h-Eileanan an Iar by saying that we will support him. [Interruption.]

The First Deputy Chairman of Ways and Means (Sylvia Heal): Order. Far too many loud private conversations are taking place.

Mr. Browne: To conclude, I am afraid that I am going to disappoint the hon. Member for Na h-Eileanan an Iar and others, by being sympathetic to the arguments that they have put. Even though their amendment is rather too widely framed for our tastes, we will nevertheless support it, because we share their objectives.

Sir Robert Smith: I declare an interest as a former owner of a Nissan Micra, which seems to be relevant to this debate. I want to reinforce the importance of recognising just how difficult life is for those operating in the rural economy and how symbolic it would be for the Government to accept the amendment. Doing so would send a signal to those communities that the Government understand just how difficult the current climate is. The rising world costs of fuel and other inputs into agriculture are severely stretching the farming and forestry economies. Removing the added cost of vehicle excise duty on vehicles that many have no choice but to operate would be a way of sending the rural community the signal that the Government understand how difficult life is.

The recent problems in Grangemouth have exacerbated that concern in rural communities. Concerns in those economies about both price and supply could be addressed if the Government took the amendment on board. They would have to come back with regulations and the House would have to approve their drafting, which is an important caveat.


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Mr. MacNeil: The cost of diesel, at £1.34 a litre, exacerbates the situation and underlines exactly what the hon. Gentleman is saying.

Sir Robert Smith: Current costs—far higher than any planned for by the Treasury—are such that the market is already sending dramatic signals to the wider economy. The amendment would be an important way for the Government to send the signal that they understood the burdens faced by rural economies and the important role that the rural economy plays in the fabric of our society. I urge the Government to support the amendment.

Mr. Mark Hoban (Fareham) (Con): I am probably the first hon. Member to address the amendment whose constituency does not contain any remote rural parts.

Mr. Jeremy Browne: Have you got a 4x4?

Mr. Hoban: No, I have not got a 4x4, either.

I sympathise with the concerns raised by the hon. Member for Dundee, East (Stewart Hosie), who made a persuasive case for his amendment. However, we are working in a matrix of ways to determine the exemption that owners of such vehicles will apply for. Part of that is about location and about what is rural and remote—no part of Fareham is rural and remote, which makes things easy.

That matrix is about employment, too. The hon. Gentleman specified some occupations—agriculture, forestry and people working in ski resorts—but it would not take very long to come up with some more suggestions. What about a rural shopkeeper, who might use his 4x4 to load up at a cash and carry? Where do we draw the line in defining the occupations that should be supported through the exemption?

The third element to the matrix is the type of vehicle that will be used. I understand as well as anybody that some vehicles will be seen as a lifestyle choice or fashion statement in one context and a lifeline in another context. The context will depend on where a particular four-wheel drive vehicle is, who is using it and what its purpose is.

That makes it quite difficult to say how we should characterise the types of vehicles that should qualify for the exemption. My concern is that accepting the amendment would put us at risk of having to produce detailed and complex regulations, which would create uncertainty in the minds of taxpayers. They would be expensive to comply with because, when applying for a new VED disc, people would have to provide not only valid MOT and insurance certificates, but proofs of residence, occupation, and whether the job was part or full-time. The process would create a burden for people applying for exemptions, and it would not be as straightforward as the hon. Member for Dundee, East suggested.

Rob Marris: Does the hon. Gentleman agree that unless one got the definition right, people could drive a coach and horses through it?

Mr. Hoban: I suppose that a coach and horses would not qualify for an exemption. However, the gist of the hon. Gentleman’s remarks holds true.


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