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EC fuel tax proposals won't help, says FTA
Page 10
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by Chris Tindall armonising diesel duties ill not cost the governierrt billions in lost revnue, but it is set to oppose s introduction regardless, urns the Freight Transort Association.
The European Commissin's proposals, which seek ) achieve better envIronlental protection and educe distortions in the
ingle market, were nnounced by EC tax cornlissioner Frits Bolkestein ist week (CM 25-31 July), he reduction of the UK's diesel duty would apply sly to vehicles over 16 tonnes.
But the plans are set to face mounting oppotion from governments across Europe, includig the UK, and not necessarily because of a loss revenue.
"You have to be realistic," says FTA chief !.onomist Simon Chapman. The road user large will offset any reduction in fuel duty.
"I think the government opposition is not on le basis it's going to lose billions on tax. It's on hilosophical grounds." Chapman explains that le government will not want to lose its indepenNice on taxing something like fuel, as it is perlived as an erosion of national sovereignty.
The chances of the proposals making further 'ogress are slim, Chapman says, as it requires ianimous approval of member states and not St the UK. He says southern European states we relatively low levels of fuel duty and any crease would reduce their ability to compete in key north European markets.
The FTA also slams the plan to reduce duty on larger vehicles only, claiming this will further distort the market and run counter to the Commission's environmental goals if hauliers up-spec their vehicles to take advantage of the reduced diesel tax. The International Road Transport Union agrees.
Only the largest commercial vehicles would be able to benefit from this rate," says a spokesman. This would exclude the majority of professional users and the proposal would raise overall transport costs, to the detriment of the economy."
However the RHA believes the proposals will happen and says it's just a case of when. Chief executive Roger King believes the government will not oppose them simply because it makes sense not to. "Common sense will say that if they are embarking on a road user charge, which they are, they have to reduce the duty," he says.