Vehicle Excise Duty needs re-evaluating for small businesses - Williams

Roger Williams, Liberal Democrat Food and Rural Affairs spokesperson and MP for Brecon and Radnorshire, has called for the government to reconsider the impact its proposals for a graduated Vehicle Excise Duty (VED) in light of the potential problems it will create for small businesses.

Mr Williams said:

“The Government have announced a graded system for Vehicle Excise Duty.

“While this is fine for people who can choose what type of car they drive, it is not always possible for people who require a specific type of vehicle for their business.

“Many small businesses, particularly those in rural areas, are already feeling the pinch of huge fuel price rises and will now be hit by these increases in VED.

“This could be the final straw for many small businesses and the impact on the communities in which they are based, could be devastating.

“I would like the Government to look at this matter again and consider an exemption for those small businesses that will be most severely affected.

“I was particularly distressed that the minister didn’t feel it necessary to small businesses should be exempt”

NOTES:

The exchange between Roger Williams and Jane Kennedy, Financial Secretary, HM Treasury, was as follows:

Martin Salter: Will my right hon. Friend give way?

Jane Kennedy: If my hon. Friend will allow me, I will give way to the hon. Member for Brecon and Radnorshire (Mr. Williams) first.

Mr. Williams: The Minister has made a good case for a graduated system of vehicle excise duty, particularly for people who can choose which vehicle to drive, but people in some categories—especially small business people—need a vehicle of a specific size in order to carry on their trade, and the retrospective part of the Government’s proposals will be particularly damaging to them. Does the Minister not recognise that this is really an attack on small businesses, and on people who are trying to start and build on their businesses?

Jane Kennedy: Perhaps I could respond to the hon. Gentleman’s point together with that made by my hon. Friend the Member for Reading, West.

Martin Salter: I haven’t made it yet.

Jane Kennedy: I was about to invite my hon. Friend to do so.

Martin Salter: I thank the Minister. It is a similar point. The Minister rightly spoke of allowing people to make choices in order to cut their vehicle excise duty by 2010, but that was predicated on the assumption that people would have enough money in their family budgets to change their cars before 2010. Many of the people whom the Minister and I represent do not have that disposable income. That is the nub of the problem.

Jane Kennedy: My hon. Friend and others are presenting a strong argument, and I hear what they say. The package that we presented in the Budget, and which I am explaining today—in defence against the attack by the hon. Member for Runnymede and Weybridge, who claims that the Opposition are the motorist’s friend—specifically seeks to influence purchase choices when they are made. We already know that that is the way in which the market is moving.

Later in the debate Jane Kennedy made the following point in response to the issue of small businesses:

Jane Kennedy: I have been listening very carefully to the points that my hon. Friend and other Members have been making about retrospectivity. As Members know, this will be legislated for in the Finance Bill of 2009, so there will be ample time for us to discuss the issue on many occasions before then.
The hon. Member for Brecon and Radnorshire (Mr. Williams) made a point about small businesses. Small businesses using vehicles are no different from other users of such vehicles. I hear his point, but many families also have no choice in that they need a car to travel to work or to school. I do not believe that we ought to have a specific measure to help people in small businesses.

Ends/diwedd

Publish date: 16th May 2008
Modified: 16th May 2008

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