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Probe into fuel tax
Page 6
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The UK's high fuel tax regime could result in the European Commission
facing a legal probe. Dominic Peffy reports.
THE EUROPEAN Commission could come under legal scrutiny over the high levels of tax on diesel in this country in a bizarre twist following the collapse of Lorry Road User Charging.
As part of their response to the LRUC debacle the Freight Transport Association (FTA) and Road Haulage Association (RH A ) have engaged lawyers to examine the decision relating to European Commission policy on fuel tax harmonisation. In effect they are asking the lawyers to find out whether the EC may be in breach of its own commitments by not taking action against the UK in relation to its high levels of fuel tax.
James Hook ham, deputy chief executive at the FTA, explains: "Counsel is looking at whether there's an explicit policy to harmonise fuel duty and if the Commission is then in breach of that. We expect an answer this month as to whether there is a case or not."
Both trade associations believe that the LRUC was in part created to stave off any EC interest in the matter when it was first announced in 2001.
Although the EC has set minimum levels for diesel duty there is currently no maximum.
However, Roger King, RHA chief executive, argues that the high level of duty in the UK creates unfair competition.
"Most member states have a tax level way below anything that we have. As a direct consequence of this it is leading to a distortion of the competition in the market." he says.
News of the legal probe broke as both associations launched a £100,000 inquiry into the state of the industry. The Burns Freight Taxes Inquiry, chaired by former NEC boss Robbie Burns, will examine the effects of foreign competition and high diesel duty on the UK haulage industry and the wider economy.
The associations hope to publish the report by the end of September.
They hope the evidence in it will convince the government to introduce a fuel tax rebate for the haulage industry.
The results of an FTA study published this week show that high fuel costs ranked as the number one concern amongst operators. (See also Investigation, page 30) • Contact 0870 0113331 evidence@freight-taxes.cauk The Burns Freight Taxes Inquiry PO Box 259 Tunbridge Wells TN2 9BS