Dery tax cut c
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THE BIG PUSH is on to reduce dery tax. The Freight Transport Association, Confederation of British Industry, and the National Farmers Union have all joined the Road Haulage Association in lobbying the Chancellor of the Exchequer to cut the duty in his Budget next month.
That the CBI is involved is especially significant for it is one of the few bodies which will carry real weight when Sir Geoffrey Howe is preparing his Budget.
In its submission entitled Costs are Crucial, the CBI is calling for a progressive reduction of dery duty, towards the level in most EEC countries. It is reluctant to put a precise figure on this, but its calculations suggest a reduction of around 10p per gallon.
At a press conference last week, it said it wanted the reduction to be phased in over a fouryear period so that the British car industry has time to produce diesel-engined cars. CBI tax committee chairman Alan Willingale said: "We don't want to overdo it and suck in diesel cars from abroad."
The PTA acknowledges this in its long-awaited Budget submission, but says: "We would argue that the needs of 10 per cent of the total fleet of diesel-engined vehicles should not determine the requirements of the other 90 per cent."
It says that dery tax still stands at 60p per gallon, plus vat, in spite of a widening of the dif ferential in tax on petrol and derv, and that the rate of duty in other EEC states is generally lower.
It has told the Chancellor that a reduction in dery tax would represent an "excellent stimulus" to the economy and would remove a competitive disadvantage which British industry suffers against EEC companies.
The NFU call for a reduction comes near the top of its shopping list. It says the continual increase in transport costs, many of them caused by dery prices, is having a severe impact on the economy of rural areas.
The FTA has also urged a "modest approach" towards the taxing of 38-tonners, saying that it would be wrong to increase the vehicle excise duty for them without reducing the rate for other vehicles.
It says that the Department of Transport is reviewing the methods it uses to calculate different classes of vehicles' track costs, and says that 38-tonners could be unfairly overtaxed if existing calculations are used It has also repeated its call for the 1982 Finance Act powers to down-licence vehicles to be implemented. This would permit operators to pay lower rates of duty if, for example, a nominal 38-tonner was never operated at more than 30 tonnes gross.
The FTA wants the Government to invest more money in the transport infrastructure, and has called for this to be devoted in particular to road and by-pass construction. It believes this would help the economy, the environment and the construction industry.