For a moment, I thought that I had been remiss by not welcoming the hon. Member for Birmingham, Yardley to the Committee, but I am told that he has been here before, so there is no need for me to welcome him now. In case I missed his earlier appearance, I apologise.

Agricultural vehicles benefit from exemptions from payment of vehicle excise duty which came into effect from April 2001. The clause gives the Secretary of State for Transport the power to redefine agricultural vehicles within the 1994 Act, for the purposes of maintaining the exemption in good order.

The current definition of an agricultural vehicle within the 1994 Act was established when the distinction between vehicles built for purposes relating to agriculture and vehicles with wider utility was starker, as Opposition Members have pointed out. The agricultural machine taxation class currently covers tractors, light agricultural vehicles and agricultural engines. Examples of the type of light agricultural vehicle treated as eligible for exemption are all train vehicles or quad bikes, and an example of the type of agricultural engine eligible for exemption is a crop sprayer.

As has become clear in our discussions, some vehicles are capable of being used on the land although they are not built primarily or solely for that purpose. That leaves the current definitions open to challenge. I am sure that the Financial Secretary would have liked to be here to carry on the discussions that he promised when we debated clause 11. Sadly, he cannot, and I have the pleasure of leading the debate.

On the Thursday sitting before the recess, when we did not sit in the afternoon, I took the opportunity to travel to Bridgend to meet business leaders and members of the farming community, and this very issue was raised. That preparatory discussion certainly informed my thinking as I prepared for the debate.

To answer the third question asked by the hon. Member for Wycombe, the clause provides for an order-making power that will be subject to the affirmative resolution procedure. The intention is to use the power to achieve firmer definitions and legislative concurrence between the vehicle excise duty exemption and eligibility under the Hydrocarbon Oil Duties Act 1979 for agricultural vehicles to use duty rebate diesel. That will ensure greater clarity, as those who are entitled to license their vehicles as exempt within the agricultural machine taxation class will also be eligible to use red diesel. The definition of an agricultural vehicle under the 1979 Act for the purposes of eligibility to use duty rebate diesel was updated last year by statutory instrument No. 93.

The Driver and Vehicle Licensing Agency is currently discussing the updates of definitions with the industry, and it is actively preparing an order that will, in due course, utilise the power granted by this clause to achieve that legislative concurrence. The agency is also working with HMRC and the industry to issue a memorandum of understanding on which vehicles are eligible for VED exemption and to use duty rebated diesel. It is anticipated that by next spring the Secretary of State for Transport will be in a position to put a  draft order before Parliament utilising the flexibility conferred by this clause, to answer the hon. Gentleman’s first question.

On how the exemptions will apply and whether we intend to introduce any new agricultural vehicle taxation classes or exemptions, there is no intention at this time to introduce a new agricultural vehicle exemption. The work on improving the current agricultural vehicle definitions within the existing exemption is ongoing. Depending on the outcome, there may be scope for the creation of new definitions in line with advances such as technological innovation.

The hon. Gentleman and the hon. Member for Ludlow asked about off-road vehicles and 4x4s. The Government recognise that four-wheel drive vehicles are used by other businesses, such as professional dry stone wallers and veterinarians, in support of the farming sector, as well as by farmers themselves. There is no intention to introduce an exemption for those who use their four-wheel drive vehicles on the public road. It remains the case that the tax system is designed so that where a vehicle is an essential component of the business activity, businesses can deduct from their turnover all the costs incurred for the sole purpose of generating business profits. Applicable motoring expenses are therefore allowable for deduction against turnover in such circumstances. However, the DVLA is discussing with the industry how the powers conferred by this clause can be used to update the exemption.

A separate exemption already exists for vehicles, including four-wheel drives, that are used mainly on the land. That exemption applies where vehicles are used between different parts of the land in agriculture, horticulture and forestry. It is available where a vehicle is used on the public road only to pass between different areas of land occupied by the same person for a distance of no more than 1.5 km. Provided that that condition is met, vehicles including four-wheel drives that are not otherwise eligible for exemption under the agricultural machine taxation class may be eligible for exemption. The DVLA is consulting industry representatives about updating the definition and to ensure that the proposals reflectlast year’s administrative changes on hydrocarbon oil duty.