Don't increase VAT!
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with regard to the comments made by Charles Henderson (CM 21-27 May), Mr Henderson is quite right when he states that the cost of fuel to the small operator is about 45% of turnover, but while the increase in fuel tax is, indeed, a catch-all situation, I cannot agree with his suggestion that the Government might consider putting VAT up to 75% as a means of dissuading people from using their cars.
Surely he does not believe that if such an increase in VAT were to be implemented, the powers that be would allow hauliers to recover the full amount. At the same time, any such increase would not only put those living in country areas out of their cars, but probably out of work as well, as no alternative form of transport would be available to them.
When the previous Government introduced the fuel tax increases, it did so as a means of encouraging people to use alternative forms of transport as opposed to their cars, but it failed to realise that, in many cases, such an alternative did not exist, or did not meet the real demands of the public.
What it did achieve, however, was to put road haulage operators under increased financial pressure which, with the ending of cabotage regulations, presents the very real possibility of the collapse of many businesses as our foreign counterparts, with the advantages of cheaper fuel and VED, drive down what are already rubbish rates.
The Road Haulage Association's idea of an Essential User Rebate scheme may not be the answer to all our problems; it may not even level out the differences between ourselves and our foreign competitors. But it does, at least, offer a logical solution to the problem of high fuel costs, together with one that might just be acceptable to Government ministers.
At the end of the day, the Government might ask itself the question: does it really want a road transport industry in the UK, or should it leave that side of the industry to other European countries? If the answer is to leave it to others, then it had better prepare itself for not just tens of thousands of job losses, but for billions of pounds worth of lost revenue.
CD Price, Clwyd.