Letter from the Minister of State at the Department of Transport to the Chairman of the
Committee
COM(96)331: Proposal for a directive on the application by Member States of taxes on certain
vehicles used for the carriage of goods by road and tolls and charges for the use of certain
infrastructures
At the end of its report on this proposal on 20 November (Fourth Report, HC 36-iv, paragraph
3.13) the Committee asked how, in view of the ruling of the European Court of Justice in case
C-300/89; the Government believed a dual legal base could be justified and whether it would be more
prudent to press instead either for Article 99 as the sole legal base or for the proposal to be
divided into two measures.
Our starting point was that Article 75 on its own, as proposed by the Commission, was not
acceptable for a proposal which includes elements which unquestionably relate to an excise duty.
We therefore considered Article 99 to be essential to the legal base, as had been the case with the
existing Directive (93/89) which this proposal is intended to replace.
The Government is well aware of the ECJ case law on the combination of co-operation and
unanimity. Originally therefore it was our view that the best course might be to split the proposal
into two, one part based on Article 99, the other on Article 75. Alternatively as second best, we
could accept Article 99 as the sole legal base. Splitting the proposal would be a novel procedure
which would itself not be without risk. If the two proposals, one adopted under unanimity the other
under co-operation, were seen as linked to each other, that might itself be thought to infringe the
prerogatives of the European Parliament and be open to the same objections as a dual legal base
might be. Even if the two proposals could be independent of each other, splitting would still
depend on the Commission's willingness to proceed in that way. Although the Council could in
principle amend the proposal by deleting the provisions relating to vehicle excise duty, only the
Commission would be able to bring forward a separate new proposal containing those provisions. It
is doubtful whether the Commission would agree to do that.
At its meeting on 3 October 1996 the Transport Council noted that changes in the balance between
the Community institutions brought about in the Maastricht Treaty opened up the possibility that
if a proposal based on Articles 75 and 99 jointly were referred to it, the ECJ would review its
judgement in the C-300/89 case. The fact that the Treaty explicitly provides for combining the
co-decision and unanimity procedures (in the culture and environment titles) strengthened the
likelihood, it was argued, that the Court would accept a combination of the co-operation and
unanimity procedures. The UK has some reservations about the robustness of this argument, but since
it appeared to have a fair element of support in the Council it may in the end have a better chance
of success than trying to obtain agreement to the measure being split or based on Article 99 alone.
That is why our Explanatory Memorandum of 4 November said that we believed the case for a dual legal
base has been strengthened. However, there are, in our view, potentially greater risks in the dual
base course than in splitting the proposal.
We shall have to see how things develop in the Council. It is likely, as a result of the
Council's further discussions of the Commission's proposal on 12 December, that some significant
changes will be made in it. I expect the Council to concentrate on the substance of the proposal
in the first instance, and to revert to the question of legal base only when the text is more
settled. An important consideration then will be the degree of support in the Council for each of
the possible courses.
I am sending a copy of this letter to the Lord Geddes, Chairman of Sub-Committee B of the House
of Lords European Communities Committee, which asked to see our response on this point to your
Committee. I will let you have a supplementary Memorandum on the draft Directive when the
prospective changes to it have crystallised sufficiently.
17 January 1997
