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Vehicle Excise Duty

Volume 932: debated on Thursday 26 May 1977

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asked the Chancellor of the Exchequer why internal combustion engines in all their various forms are required to be licensed in addition to paying duty on the fuel purchased to propel them.

Vehicle excise duty, which has its counterpart in many other countries, is a demand-light tax which makes a necessary contribution to the revenue. To abolish vehicle excise duty and replace the revenue by an increase in petrol duty would add 18½ per gallon to the price of petrol.

I thank the Minister for that reply. Is the criterion of a necessary contribution to the revenue the main reason? If so, is the Minister interested in similar suggestions that I might be able to put to him?

Contribution to the revenue is not unimportant, but I remind the hon. Gentleman that the existence of this tax has been debated, and that for industrial reasons it is felt that it is better to raise the revenue in this way than to put 18½ extra on the price of a gallon of petrol.


asked the Chancellor of the Exchequer what is the annual yield to the Exchequer from road tax.

How much is lost through evasion and what are the Government doing about it?

I am sorry, but I do not have figures showing how much is lost through evasion, because, by the very nature of the thing, it is difficult to know. I have no doubt that a certain amount is lost through evasion and I can see that this is one possible weakness in the operation of the duty. Of course, there are other reasons why we have to maintain the duty.