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Tuesday, 17 October, 2000, 10:42 GMT
Business urges cut in vehicle duty
protesters
Protests nearly brought the UK to a halt
Businesses in the UK have called on the government to cut vehicle excise duty on heavy goods vehicles rather than reduce fuel duty.

Last month, protests over the rising price of petrol almost brought the UK to a standstill.

Protesters backed down, but only after they called on Chancellor Gordon Brown to act to reduce fuel duty within 60 days.

But the easiest way to help road hauliers - one of the group's hardest hit by rising prices - would be to cut vehicle excise duties for heavy goods vehicles, argues the British Chambers of Commerce in its submission to the Chancellor ahead of the pre-budget report.

The pre-budget report is expected either at the end of this month or early in November.

European competition

The BCC argues that cutting vehicle excise duty to the European Union minimum of 420 from current levels of between 2,500 and 4,000 would help hauliers.

It says that the average British 40-tonne truck pays about 25,000 a year in vehicle excise and fuel duties compared with 10,000 in France or Germany. This heavy tax burden is, in part, offset by lower corporation tax in the UK.

Paying for this cut in duty should not be difficult, the BCC says.

The Treasury is estimated to have pocketed an extra 1.5bn in revenues from this year's rise in the oil price.

This should cover both the cost of a cut in vehicle excise duty, estimated to be 500m, and a freeze on the current levels of fuel duty, about 700m.

The remaining 300m should be targeted at rural communities, it says.

"No government should be held to ransom by protests but the current strategy to increase fuel prices as a means of cutting congestion and pollution is fundamentally flawed," the BCC's director general Chris Humphries said.

"While all can benefit from a general freeze in fuel duty, measures to combat rising haulage costs, the main ill effect of fuel prices on businesses, are necessary," he added.

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