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Finance Bill

We have had an important, if short, debate about something that has an impact, especially in rural areas. We heard some arguments in support of the exemption proposed, with perfectly reasonable intent, by the hon. Member for Dundee, East (Stewart Hosie) through amendments Nos. 9 and 10. However, we also heard, not least from the hon. Members for Fareham (Mr. Hoban) and for Taunton (Mr. Browne), why it is difficult to draw a clear line to produce an exemption that would achieve the aims of the hon. Member for Dundee, East. I welcome the acceptance of the principle that price should be used to influence behaviour. That is an important point of agreement throughout the Committee, and it is good to find points of agreement in such debates before homing in on matters on which there might not be 100 per cent. agreement. I recognise the points made by the hon. Members for West Aberdeenshire and Kincardine (Sir Robert Smith) and for Argyll and Bute (Mr. Reid) about the difficulties experienced in their areas and the pressures on rural businesses and industries. As the hon. Member for Fareham said, it is important to try to get any exemptions on duties right, be that VED or anything else, and to ensure that they can be defended and maintained consistently and coherently. Although the hon. Member for Taunton is supporting the amendment—and taking quite a lot on trust—he made similar points about the practicalities of any of the exemptions suggested. There are some 4x4 vehicles in bands E and F. We hope that the changes to VED rates in this Bill and those that are signalled for future Finance Bills will lead to the introduction of new 4x4 vehicles in lower bands. Let me answer the specific questions asked by the hon. Member for Dundee, East, especially that about mountain rescue. First, we have been considering the tax treatment for mountain rescue vehicles, but there is an issue with charity law. Government policy on the tax treatment of charities is neutral between them, and we would not want to pursue a policy that appeared to favour one charitable cause over another. The charitable status of mountain rescue organisations therefore presents the Government with potential difficulties, as a specific VED exemption would appear to favour them over other charities. Some mountain rescue vehicles that are registered as ambulances are exempt, but there is a difficulty with other such vehicles, which we are considering whether we can get around. That is one reason why we have not been able to announce a complete exemption for mountain rescue vehicles. The hon. Member for Dundee, East discussed a potential exemption, helpfully leaving the relevant definition to the Treasury. It would be difficult to define the exemption in a way that would achieve his aim. His amendment would apply the VED alternative fuel discount to working vehicles, which are undefined in his amendment, but the discount currently applies equally to vehicles that are used primarily either for private travel or for business activity. Adding the condition that only working vehicles that are alternatively fuelled qualify for the reduced rate would undermine the incentive for other vehicles and would unnecessarily complicate the tax system. We also believe that the compliance and administrative costs of such a change would be considerable, as the hon. Member for Fareham sensibly pointed out. The Driver and Vehicle Licensing Agency would need to verify that a vehicle was a working vehicle, which would be difficult to verify on an individual basis and even more difficult to police. Working vehicles such as agricultural vehicles are already exempt from VED, and there is a separate exemption for vehicles, including four-wheel drives, that are used mainly on the land. That exemption is available where a vehicle is used only on a public road for a distance of no more than 1.5 km to pass between different areas of land that are occupied by the same person. So, there are already exemptions, which could be policed and guarded more effectively than the very open exemption that the hon. Gentleman suggests.