Finance Bill

There may well not be a VAT windfall, because when people spend more money on one good or service, they tend to spend less on others. They have only a certain amount of disposable income. On the hon. Gentleman's point about offshore oil, we do not yet have the out-turn for this year's oil receipts—the Treasury will not receive them until July—and he needs to remember that oil company profits can be offset against investment decisions in the North sea. We will not have proper knowledge of North sea oil receipts until the pre-Budget report. Overall, the wider VAT effects mean that there may be no windfall, and that is the difficulty with the proposed amendments. I understand and sympathise with the worries that are driving Scottish Members on both sides of the House to suggest mechanisms that would provide relief. I have met some of them to discuss those ideas and we will examine them. However, those Members must understand and acknowledge the difficulties with their ideas. There are no easy solutions to the pressure that families everywhere are feeling because of the huge rises in the price of oil and the knock-on effects on family budgets and business profits. The difficulty with the new clauses and amendments is that they seek to redistribute a tax windfall that does not exist. New clause 9 also suggests that reductions in fuel duty as a result of the proposed fuel duty regulator should be paid directly to road hauliers. I have great sympathy for road hauliers, especially the smaller companies that find it much harder to pass on their increased costs. I have spoken to many hauliers and their representatives, and I am not unsympathetic, but why should the provision apply to hauliers and not to other equally deserving essential road users? Who would be in the scheme and how would we decide? The Government recognise the road haulage industry's concerns, and those of other businesses, over the current cost of fuel, and we continue to examine the position. Requests for reduced duty rates for road haulage operators are often associated with the relative competitiveness of the industry compared with foreign operators. Studies have shown that European duty differentials are in many cases offset by other costs such as lower labour rates and other employer costs. Furthermore, a scheme would require the introduction of an administrative mechanism, with potentially high costs. Also any system would create significant compliance and fraud risks. The Government have continued to support the industry through other policy measures such as the halving of, and subsequent freezes to, HGV vehicle excise duty rates, and the reduced pollution certificate scheme. Also the Government recently announced £24 million of funding for enforcement, in particular aimed at those conducting international trips. That will mean a 50 per cent. increase in the number of HGV checks carried out, including two new enforcement sites at key points on the road network. I listened to the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) outlining his ingenious scheme, and he helpfully sent an explanation to the Chancellor. We continue to look at the detail of his proposals, but I hope that he will acknowledge that it would cause practical difficulties that are not easily solved. However, I am not unsympathetic to his case, and I commend him on his ingenuity. Amendment No. 9 deals with VED for off-road vehicles and also relates to rural areas. It proposes that existing alternative fuel discounts should be extended to cover off-road working vehicles. Those used in agriculture are already exempt from VED and authorised to use red diesel. The VED exemption permits vehicles to travel on public roads for a distance of 1.5 km in order to travel between different land areas. To have any effect, therefore, this amendment would require the Treasury to make, and the DVLA to enforce, a new definition of off-road working vehicle that encompassed a broader range of vehicles. However, it is unclear how that could be achieved, and the new clause does not help with the definition. It is difficult to imagine how that could be done without providing an incentive to fraud, and therefore the need for a costly enforcement regime. However, I am happy to keep talking about those ideas. Finally, let me turn briefly to Government amendments Nos. 22 and 23, which make minor amendments to clause 75. The clause extends for a further five years the 100 per cent. capital allowances scheme for businesses that invest in the cleanest cars. The clause updates the carbon dioxide emissions threshold to maintain the focus on the cleanest cars and rewards people appropriately. The Government amendments are required because two small consequential changes were initially overlooked. They are needed to effect the transitional provisions and to exempt businesses that buy or lease the cleanest cars. I therefore commend the Government amendments and urge the House to reject the Opposition new clauses and amendments.