1. We have given further consideration to the following on the basis of a
Supplementary Explanatory memorandum. We maintain our opinion[2]
that the it raises questions of legal and political importance, and continue to make no
recommendation for its further consideration at this stage:--
Department of Transport
(17578)
11642/96
COM(96)331 |
Draft Directive on the application by Member States of taxes on certain
vehicles used for the carriage of goods by road and charges for the use of certain
infrastructure. |
| Legal base: |
Article 75; co-operation procedure; qualified majority voting; and Article
99; unanimity. |
Background
1.1 In November 1996, we considered an unofficial text of a previous version of this
proposal on the basis of an Explanatory Memorandum dated 4 November submitted by the Minister of
State at the Department of Transport (Mr Watts). The proposal was concerned with the taxing and
road use charging of heavy goods vehicles (HGVs) over 12 tonnes maximum gross weight. It was a
replacement for Council Directive 93/89 which was annulled by the European Court of Justice on a
technicality, though its effects were allowed to continue.
1.2 We noted that the Government's objections to the proposal seemed to be
formidable, and we considered that the proposals raised matters of both legal and political
importance. We also noted the difficulty of having recourse to a dual Treaty base when one of the
two Articles cited provided for qualified majority voting under the co-operation procedures and the
other for adoption by unanimity. We asked the Minister how he considered that a dual legal base
could be justified, and whether it would be more prudent either to use Article 99 as the sole base
or to split the measures into two.
1.3 In his reply of 17 January, which we print below, the Minister set out his view
of the practical and legal problems associated with the choice of legal base, and explained that
the Council was likely to concentrate on the substance of the proposal in the first instance,
reverting to the legal base when the text was more settled.
The revised proposal
1.4 The Supplementary Explanatory Memorandum from the Minister which we received on
19 March brings us up to date with developments. He tells us that, following further discussion
in the Transport Council, the Presidency has produced a compromise text, of which he has sent us
a copy. He explains that:
"It is not a depositable document. It was appended to a report, to which some of the
footnotes refer, which is a Council working document. The text is a Presidency proposal and does
not necessarily reflect the agreed views of the Council. Further consideration by the Council may
lead to some further changes. Nevertheless the text gives a reasonable idea of the direction of
the Council's thinking so far."
1.5 As to the content, he says:
"The proposal still applies to heavy goods vehicles over 12 tonnes maximum permissible
weight. The main changes in this text from the original Commission proposal are:--
a. the differentiation of vehicle excise duty (VED) and equivalent
national taxes according to Community vehicle engine emissions standards is made permissive rather
than compulsory. Vehicles complying with Euro I and Euro II standards may be taxed at up to 50%
less than the prescribed minimum rates;
b. the deletion of maximum rates of VED;
c. replacing the complex matrix of maximum (time related) user
charges, dependent on emissions standards and road wear, by a single maximum rate of user charge;
d. deletion of minimum rates of user charges;
e. the inclusion of a power for Member States applying user charges
to set lower rates for vehicles registered in peripheral Member States;
f. deletion of the discretionary element in (distance related) tolls
to cover external costs;
g. deletion of the proposal for Member States to be able to apply
a surcharge on 'sensitive routes'."
The legal base for the proposal
1.6 The amended proposal (said by the Minister to reflect the views of the Transport
Council) is for a joint legal base of Articles 75 and 99, with co-operation procedure (on the
assumption that with a joint legal base the procedure followed should be that which gives the
European Parliament the most influence), and unanimity (because of the inclusion of Article 99).
The Government's views
1.7 The Minister says that this text is "far more acceptable to the
Government", because of the inclusion of Article 99 in the legal base and the deletion of most
of the provisions to which the Government objected. And he would not expect the proposed changes
in charges to place UK hauliers at a competitive disadvantages. However, the Minister still has
a number of objections to the draft. He says:
"...the provision allowing Member States to differentiate VED according to whether they
comply with Euro I or Euro II environmental standards, or neither of those standards, and in so
doing to set rates below the prescribed minima, is unnecessary and wrong in principle. Member
States should be free to determine their own tax structures and rates, subject to the minimum rates
introduced in Council Directive 93/89...In addition, there is no point in establishing minimum
rates, if they can be breached for vehicles that meet certain standards. The present wording might
also inhibit the Government's plans to reduce VED for HGVs that meet stringent emissions standards.
"Allowing Member States which impose user charges to set reduced rates for vehicles
registered in certain Member States is discriminatory and conflicts with the underlying principle
of user charges, which is that all vehicles to which the régime applies should pay in
proportion to the time they spend on the road network concerned, as a contribution to the cost they
are imposing. The origin, destination, and country of registration of the vehicle are immaterial.
Under a similar transitional provision in Council Directive 93/89 the five Member States operating
the joint "Eurovignette" scheme allowed vehicles registered in Greece, Ireland and
Portugal to buy permits to use their motorways at half the standard rate. The transitional period
for Irish and Portuguese vehicles has expired; that for Greece expires at the end of 1997. It is
questionable whether the creation of a further transitional period for vehicles from these countries
is justified."
Conclusion
1.8 We are grateful to the Minister for providing us with this Supplementary
Explanatory Memorandum, particularly since he says that the Presidency hopes that the Transport
Council will reach a Common Position on the proposal at its meeting in June.
1.9 On the question of the legal base, we share the Government's reservations
about the robustness of the argument that, in the light of changes made by the Treaty on European
Union, the ECJ would be prepared to review its ruling in Case C-300/89 Commission v Council
that it is not permissible to have recourse to a dual Treaty base where, as we are told the
Presidency is proposing in this case, one of the two Articles cited provides for qualified majority
voting under the co-operation procedure and the other for adoption by unanimity. However, we also
agree with the Government as to the importance of ensuring that a Directive which harmonises
indirect taxation rates includes Article 99 in the legal base. We recognise the difficulty of
achieving this in the negotiations by either of the other ways proposed (splitting the proposal into
two, one part based on Article 99 and the other on Article 75 or adopting Article 99 as the sole
legal base).
1.10 In the absence of a text, we do not clear the document.
2.(17578)--; see HC 36-iv (1996-97), paragraph 3 (20 November 1996). Back
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