Examination of Witnesses (Questions 280-299)
JONATHAN SHAW
MP, MR ROBIN
MORTIMER AND
MR RON
SCRUTTON
16 JULY 2008
Q280 David Taylor: Was the department
consulted on the proposed changes to vehicle excise duty which
start in April next year, which have a disproportionate impact
on rural areas?
Jonathan Shaw: The department
would have been involved. The Secretary of State and the Cabinet
would have been discussing—
Q281 David Taylor: Did the Secretary
of State ask you?
Jonathan Shaw: The Secretary of
State is responsible for overall government policy. The Cabinet
obviously discuss the Budget.
Q282 Chairman: That was not quite
the answer that Mr Taylor was hoping for.
Jonathan Shaw: If you are asking
me did the Secretary of State consult me on the Budget, no. That
is his job as he is responsible for the department.
Q283 David Taylor: The key work is
being done elsewhere. We heard that the Rural Advocate—
Jonathan Shaw: I am surprised
that you ask me. It is a rather odd question.
Q284 David Taylor: We heard right
at the start of the session that the Rural Advocate and the Prime
Minister are going to be in conflab on Southall beach, presumably
with a box of corned beef sandwiches and a crate of Irn Bru or
something next week. Why are you not involved more closely in
this?
Jonathan Shaw: The Cabinet make
the decisions. My right honourable friend, Hilary Benn, would
not have corned beef sandwiches, would he, because he is a vegetarian.
Q285 Chairman: Let us not get into
the Secretary of State's dietary requirements.
Jonathan Shaw: It was not me who
raised it. I was trying to respond to the very sensible question
that Mr Taylor put.
Chairman: There was a very serious point
put to us.
Q286 David Taylor: You are too distant
from what is happening.
Jonathan Shaw: I do not accept
that at all. You are asking me whether the Secretary of State
consulted me about the Budget. When you were a parliamentary under-secretary
of state, Mr Jack, at MAFF, you were consulted about the Budget
prior to it being published, were you?
Q287 Chairman: I can tell you exactly
how we did it when I was there. As Mr Scrutton may remember as
a contemporary of mine in MAFF, we were as ministers asked at
the time when the Budget was going to be done what our submissions
would be from the department to go into the Treasury, so there
was an element of consultation.
Jonathan Shaw: We certainly do
that but that was not what you were asking.
Q288 Chairman: I did not ask the
question.
Jonathan Shaw: You added a supplementary
and turned it round.
Q289 Chairman: We heard evidence
from Mrs Annison, one of our witnesses, who runs the rope making
business in Hawes. I quote from her evidence: "The new car
tax which is intended to deal with urban Chelsea tractors hits
the people in this area who need these vehicles"—by
that she meant 4x4 vehicles—"because we still have
some snow." When we explore that a bit further, what we find
is that the stock in trade of agricultural vehicles, Land Rovers,
etc is crucial to the wellbeing of people in particularly the
remote, rural areas. The point that was being made was: did anybody
take into account the quite considerable additional on-cost, bearing
in mind fuel price increases etc., and the impact it would have
on the type of business there? Coming back to what questions were
asked of Defra, did the Treasury ask you to give any kind of appraisal
as to the impact on the rural economy of this proposal before
the changes in Vehicle Excise Duty were enacted? Was a cost benefit
analysis undertaken by your department?
Jonathan Shaw: The cost benefit
analyses are published in the Red Book at the Budget. We do it
the same way as you did it. We put our suggestions up to the Treasury
when they are considering how they want to present the Budget
in terms of the priorities.
Q290 Chairman: The point that people
like Mrs Annison derive from that argument is that that analysis
has contributed to the overall exercise.
Jonathan Shaw: You will obviously
want to interview the Treasury ministers.
Q291 David Taylor: We are talking
about rural proofing. You are there in the interests of rural
areas.
Jonathan Shaw: On Vehicle Excise
Duty, that was a matter for the Chancellor. They obviously had
a discussion in Cabinet prior to which we would have put forward
our submissions for the policies, changes in tax, etc., in the
same way that you did. You agreed that when you were a parliamentary
under-secretary, Chairman, the Chancellor did not ring you up
and say, "Okay, Michael. What do you want me to put in the
Budget?" It does not work like that. To characterise it in
a way that it does is rather odd.
Q292 Chairman: I do not think that
is what we are trying to seek.
Jonathan Shaw: What are you trying
to seek?
Q293 Chairman: Let me spell it out
and make it clear.
Jonathan Shaw: This is a strange
line of questioning.
Q294 Chairman: It is not a strange
line of questioning. Mr Taylor asked for some demonstrations of
rural proofing where other departments would have modified their
policy to take into account the specific needs of rural communities.
We took evidence to indicate that the people we spoke to felt
that there had not been much note taken of the impact on rural
communities of the additional burden of VED, taking into account
that the types of vehicle concerned were very central to the running,
particularly, of an agricultural community in a remote part of
England. If you are saying to me that your department contributed
to the Treasury an analysis of what the impact on rural communities
was of that proposal, and the Chancellor took a decision overall
not to make a specific exception or to provide help for those
communities, people will draw their own conclusions.
Jonathan Shaw: I think I have
drawn my conclusions that you are drifting into party politics
here.
Q295 Chairman: I fundamentally resent
being told that we are drifting into party politics when I have
read out to you what one of our witnesses said to us, who asked
the question whether due note had been taken. It is not a party
political point. It is relaying to you verbatim what a witness
said to us and asking whether your department had acquainted the
Treasury with the economic impact of that particular policy proposal.
We are not asking to put you on the spot, as to whether you agree
or disagree. It is to find out whether you provided factual information
to the Treasury to acquaint them about the impact of their proposal
on those parts of the rural community that I have described. That
is a factual piece of information, not a party political point.
Jonathan Shaw: Okay. I will write
to you in terms of what the government and the department did
in terms of that particular area of policy.
Q296 Mr Gray: The Minister made an
interesting remark the other day when raising this matter in the
chamber. She said she has looked into it and there are some categories
of 4x4 which account for a lower level of VED. I could not think
of any. That might be where Defra could have taken a keen interest
as to whether or not farmers and others could have conformed to
lower VED while still using their 4x4s.
Jonathan Shaw: We are only too
well aware that many organisations and businesses have considerable
pressures on them because of the increase in fuel prices. As I
said earlier, an industry which is coastal and rural, the fishing
industry, has seen huge increases. I was having a debate in Westminster
Hall last week and many Members were speaking about their concerns
about the fishing industries within their constituencies. I reminded
the MPs who were there, because most of them were at the pre-December
council meeting debate that we had, that the issue of fuel was
not raised then. It was not something that was a central feature.
It has come upon us very quickly.
Q297 Mr Gray: Road tax, not fuel.
Jonathan Shaw: Many businesses,
in terms of the costs of transport, are finding it particularly
difficult.
Q298 Mr Gray: One of the Treasury
ministers in the chamber said it, on this question of road fund
tax. Presumably one of the Conservative Members said, "This
is going to have a terrible effect on farmers because they need
to have 4x4s." In response to that, the Minister said, "I
understand that there are makes of 4x4 which will fall into categories
which will actually reduce road tax." The reason I ask the
question is that would seem to me to be an area where, without
getting into a head to head with the Treasury, Defra, representing
rural interests and in the context of rural proofing, could reasonably
have said to the Treasury, "What categories of 4x4 are these?
Are there ways we can get round this so that farmers, game keepers
and others can continue to run their vehicles without being hammered?"
Jonathan Shaw: I will have a look
at that.
Q299 Chairman: Can we move on to
one other part of the question of intermediate objectives or the
outcomes? The second one is about economic growth being supported
in rural areas with the lowest levels of performance. The Commission
for Rural Communities indicated to us that they believed that
this DSO focuses the economic ambition of Defra and wider government
too narrowly on "areas" and on "lowest levels of
performance". Could you explain to us why you selected something
which clearly is at odds with what the Commission feel ought to
be done?
Jonathan Shaw: We want to focus
the priority on areas that are performing at a low level because
of all of the social issues that will accompany that.
| 
