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Finance Bill

I hope that I can deal with some of the points raised by Opposition Members and by my hon. Friends on clause 14. As has been pointed out, the clause makes changes to vehicle excise duty rates for cars and vans, and those changes take effect from 20 April 2010. The clause introduces first year rates of VED for brand-new cars, as was, I think, mentioned by all who spoke. First year rates will be chargeable on the first vehicle licence taken out on a new car from 1 April 2010. They are intended to influence, up front, the purchasing choices of drivers who are buying brand new cars by acting as a strong signal at the point of purchase that people can save money by choosing lower-emission cars. The introduction of first year rates means that cars emitting less than 130 g of carbon dioxide per kilometre will pay no duty on their first vehicle licence. Cars emitting between 131 and 165 g per kilometre will pay the same amount for their first year rate as they will for all subsequent licences. For cars emitting more than 165 g per kilometre, first year rates will be higher than the standard rates applicable on all subsequent licences. Only those new cars with the very highest emissions will pay the top rate of £950. My hon. Friend the Member for Wolverhampton, South-West (Rob Marris), the hon. Members for Taunton (Mr. Browne) and for South-West Hertfordshire (Mr. Gauke), and to a lesser extent my right hon. Friend the Member for Birkenhead (Mr. Field)—the latter talked about the distributional effect of the measure, and I will deal with that point separately, if he will allow me to—all pointed out that tax measures try to change behaviour, certainly when they are based on trying to incentivise activities that have a smaller carbon footprint. That is a clear way of trying to change behaviour. As my hon. Friend the Member for Wolverhampton, South-West and the hon. Member for Taunton pointed out, the measures are also revenue raisers. Revenue raising is an important aspect of the part of the Budget documents that we are discussing. The remainder of our debates today are about duties that raise a certain amount of revenue. We must not forget, or lose sight of, the fact that it is perfectly reasonable for Governments to raise revenue with which to finance the things that they do with public money. I often have that discussion with the many people who come to tell me that we should reduce all the taxes that are levied, but who never tell me where we can find the extra revenue that they wish to see spent on whatever is in their interest; in the context of vehicle excise duty, that is often on roads or other infrastructure. I can see the hon. Member for South-West Hertfordshire wriggling in his place; I am happy to let him intervene.