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Vehicle Excise Duty

Volume 474: debated on Thursday 24 April 2008

3. What the percentage change in vehicle excise duty for a Nissan Micra will be as a result of the changes to vehicle excise duty announced in Budget 2008. (200861)

4. What the percentage change in vehicle excise duty for a Nissan Micra will be as a result of the changes to vehicle excise duty announced in Budget 2008. (200862)

Nissan produces a number of different models of Micra, which have a range of carbon dioxide emission outputs—from 125 g to 175 g a kilometre. Using 2008-09 rates of vehicle excise duty, the percentage change for Micras varies between minus 25 and plus 25 in 2009-10, and between minus 21 per cent. and plus 24 per cent. in 2010-11, reflecting the fact that there are a range of emissions choices with this model of car, as there are with many others.

While the smallest cars get a tiny benefit from the vehicle excise duty changes, even many Nissan Micras are subject to a rising band of VED rather than a smaller one. Is there any hope for these smaller cars?

The issue is that the VED rate changes are designed to increase the incentive for people to buy the least emitting—the best—car in a class, which is why they are designed to reward those who buy best in class with respect to emissions by giving them a reduction in their VED rates.

Micra man. [Laughter.]

Does not the Minister accept that a very large number of motorists believe that the changes to VED bands to be introduced from 2009-10 are merely yet another stealth tax on cars, that the duty increases are in the main excessive and that they take no account of those people in my constituency—the farming community of Macclesfield and those in the hill country of the area—who need to use 4x4s? Will the Government look again into the need for 4x4s in many parts of the country?

I know that the hon. Gentleman is the epitome of Range Rover man. What I would like him and his constituents to do is be able to drive Range Rovers that emit lower amounts of CO2. That is what the changes are designed to achieve.

We now know that the changes to vehicle excise duty announced in the Budget were not a green tax; in fact, they were more of a brown tax or an eco-stealth tax. The reality is that we now know that the changes will raise £4 billion over the next three years. The Treasury admitted in parliamentary questions that motor vehicle CO2 emissions will be reduced—by 2020, I should add—by one tenth of 1 per cent. That is a disgrace: it has nothing to do with saving the planet and everything to do with—

I will do. We also know—[Laughter.] I am coming to it, Mr. Speaker. Of the £4 billion raised, £2.5 billion will go on low-income families and £375 million will be paid next year. Will the Minister add the band A to J losers to the 10p compensation package review? The Government have reviewed capital gains tax and non-doms, so is it not time to review vehicle excise duty?

I am not sure quite how to categorise the emissions that we have just heard from the hon. Lady, so I had better not try. I can, however, tell her that as a result of these changes, in respect of 15 of the 30 best-selling cars of 2006 drivers will be better off, and in respect of nine they will be no worse off, while 55 per cent. of drivers will be better off or no worse off.