Eccleston wants the BAGB to initiate a campaign to influence the European Commission to reduce the VAT on bikes in order to increase demand.
There’s a window of opportunity coming up by the end of this year, found Eccleston. The European Commission intends to review Annex H of the sixth VAT-directive (77/388/EEC) towards the end of 2002. Annex H lists all the goods and services to which member states may apply the reduced VAT-rate of 5 percent.
A successful campaign could result in bikes and bike products being added to this list. Eccleston has already approached members of the British All Party Friends of Cycling at Westminster and these MPs are said to be receptive to the idea of a VAT-reduction campaign for cycling.
In drawing up a SWOT analysis of the effect of a Euro-wide VAT reduction on environmentally-friendly bike products, Eccleston could find lots of strengths in the idea, but only one weakness. This was the fact that treasuries across Europe would suffer a drop in revenue thanks to the VAT reduction.
However, Eccleston argues, this would be countered by a reductiion in motorised traffic (a key European objective); a reduction in the number of costly traffic accidents; the improvement in public health; the increased turnover in the bicycle trade leading to increased revenue from direct corporate taxation; and increased employment in the cycle and associated trades, leading to a decrease in unemployment, which is a revenue drain.
“We recognise that increasing cycle usage is not the one and only solution to a complex transport and environmental pollution problem,” said Eccleston, owner of import company Ideal Cycles of St Helens.
“However we are convinced that the bicycle can make a significant contribution. Additional benefits of increasing cycle usage will not be limited to the environment. It will also have a positive effect on traffic-safety and public health.”