Richard Turner, Freight Transport Association deputy director general, reckons the
Page 50
If you've noticed an error in this article please click here to report it so we can fix it.
end of the 'fuel duty escalator is just the first skirmish in the tax and duty war.
• If you want to sound off about a road transport issue write to features editor Patric ITunnane or fax your views (up to 600 words) to lickyClarlia on (1181652 8912.
Thanks to the enormous efforts of all sides of our industry we are now immeasurably better off than we were before the Chancellor's pre-Budget Report speech.
6 The Chancellor's action on 9 November in bringing to
an end the fuel duty escalator marks a major victory in the industry campaign for more realistic UK transport taxes. The magnitude of this action should not be underestimated. It is a major battle won.
Now the industry has to go on and win the war.
Before 9 November the Government was firmly on the record in its intention to continue the escalator until 2002. It said the escalator was necessary to achieve environmental targets. And clearly the enormous financial income was welcome.
But in autumn 1999, the Government has changed its mind. This was completely off the form book—there has been a major strategic change in Government policy and the industry must take credit for it. Certainly here at the FTA we are delighted that our campaign, supported for the first time by a major national advertising effort, has clearly been influential.
OK, the Chancellor dressed up his statement with a few facesaving words. And he did provide himself with the opportunity to increase fuel duty again if he felt the need to. But Chancellors have reserved that right since the beginning of time. But it would now be very, very, cynical, and perhaps politicaily impossible, for him to impose any increase in fuel duty above the level of inflation next March. What is more likely is extra duty to pay for motorway and public transport improvements.
A prospect we might have welcomed seven years ago before the escalator started but not now our diesel duty is 50p per litre compared with a Continental average ofjust 20p per litre. Our individual vehicle tax bills are massively higher than our competitors. We must find a way to reduce the duty on diesel and to bring the UK level more in line with our European competition. And with the price of crude oil now going up in a spectacular way, some countries, fearing the inflationary effect, are starting to cut their already low rates of diesel duty. Unless we in the UK do something similar, our problems are not only going to remain, they are going to get worse again.
Having won this first battle, the industry—and the Government—now need to address the enormous problems of competition. The awful legacy of the escalator is that from having among the cheapest fuel prices in Europe before its imposition in 1993, we now have the highest taxed fuel in Europe and all the problems that go with that.
Then there are the other issues that affect our competitiveness: Vehicle Excise Duty—again we have Europe's highest; foreign vehicles' free ride in the UK; 44 tonnes; and so on. All these matters need addressing quickly.
Thanks to the enormous efforts of all sides of our industry we are now immeasurably better off than we were before the Chancellor's pre-Budget Report speech. We have been released from the prospect of three more years of compounded and highrate duty increases. We have made enormous progress.
But now is not the time to relax but redouble our efforts to explain the realities of transport operation in the UK and just how high taxes are harmful to the transport sector and the rest of the economy. Good riddance to the fuel duty escalator. It might have paid the Government's debts but it has caused terrible damage to our industry.
Let's step forward and put things right.