Finance Bill

I apologise to hon. Members for rushing off after my brief speech, but I have an Adjournment debate in Westminster Hall at 4.45 pm. I want to concentrate on amendment No. 9, which would allow a lower rate of vehicle excise duty for vehicles that are used primarily for business purposes off-road. Although I fully support giving people incentives to buy less powerful cars through higher rates of VED, there should be an exception for people who need to use the car off-road. I am thinking especially of farmers, gamekeepers, crofters and people who work in forestry. They use the car off-road and need a powerful vehicle to drive on muddy tracks to go about their business. They obviously cannot afford two cars—one for work and one to take the children to school, go to the village for shopping or tow loads on the public roads. It is therefore important to charge people in that position a lower rate of duty. Amendment No. 9 builds on an amendment that the hon. Member for Dundee, East (Stewart Hosie) tabled in Committee, and I believe that it deals with much of the criticism that was made of the latter by restricting the exemption more to vehicles whose primary purpose is to be used off-road for business. Vehicles that are used purely for agricultural purposes are exempt from VED, but we are considering those that are also used on public roads and are therefore not exempt. The new class of exemption should be included. Let me deal with the proposals of the hon. Member for Dundee, East. Two issues need to be tackled. The first is the need for a lower rate of fuel duty to be charged in rural areas and the second is benefits for the haulage industry. Although I would happily support a proposal that was targeted more at the haulage industry to give it help and allow it to compete on level terms with Europe, new clause 9 is too widely drawn. To help people in rural areas, we should support new clause 14, which my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) tabled. It is targeted at charging a lower rate for fuel in remote rural areas. To give an example, I recently paid a visit to Port Ellen on the Isle of Islay in my constituency, where fuel was selling at 15p a litre more than at Glasgow airport. Indeed, on some of the smaller islands there is always a greater difference. Those additional costs work their way through the whole economy. We know that the price of fuel adds to the price of all other goods. High fuel prices make it more difficult to run and sustain a business in remote areas. People in those areas suffer from a triple whammy. Fuel prices are much higher than in urban areas; they have no alternative forms of public transport; and they have much further distances to travel. It would simply not be sensible for councils to subsidise bus services as an alternative, as buses would be running round with one or two passengers. The cost to the Treasury of new clause 14 would be very small—much smaller than the cost of the amendment proposed by the hon. Member for Dundee, East—because it would apply only to a small part of the country. Cutting the price of fuel would not encourage people to drive more. People do not drive dozens of miles along twisting single-track roads because they enjoy it. They make such journeys because they have to. The car in such areas is not a luxury; it is essential. We had a meeting with the Exchequer Secretary in which she was sympathetic, and I know that the Chancellor is sympathetic, too. I urge the Government to accept our new clause.