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EC presses Brown to bring harmony with fuel tax cuts
Page 6
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la by Guy Sheppard and Dave Craik
Chancellor Gordon Brown is under pressure from the European Commission to cut fuel taxes in order to make international competition among hauliers fairer.
An EC white paper, details of which were exclusively revealed in Commercial Motor In June, proposes harmonising fuel duty across the Continent. If implemented, it would mean cutting up to 25p/lit from the price of diesel in the UK.
The paper is likely to be fiercely opposed by Brown because of the huge tax revenue that would be lost. A Treasury spokesman says: "The setting of tax rates is a matter for this country, not the EC."
EU countries with particularly low rates of tax, such as Greece and Belgium, are also likely to oppose harmonisation because any hike would be extremely unpopular with their motorists and business.
The white paper, European Transport Policy by 2010: Time to Decide, suggests that the EU should start moving towards harmonisation within the next decade. Average excise duty across Europe is well below half that in the UK.
Simon Chapman, chief economist for the Freight Transport Association, describes the proposal as ''a wake-up call' to the government. "UK industry continues to suffer from unnecessarily high freight transport costs compared with our industrial competitors across the EU," he adds.
Martin Bender, director of fuel for Arval KIK which operates the Allstar fuel card, says the fuel tax issue will now be back on the political agenda: "It adds gravitas to the issue. This will I very interesting challenge for the govt meat. Things have gone quiet for a w because the price of crude oil has stabil but as demand goes up with the winter, could become more of an issue again."
Andrew Spence, who has recently 1 dered his resignation as leader of People's Fuel Lobby (see panel), says: would rather see a reduction in fuel ta but it wouldn't be a bad thing if the or of foreign competitor's were raised to to the same level as ours."
• The Road Haulage Association will put the "biggest and most in-depth study of financial state of Britain's hauliers' oi October. Researched by the Centre Economic and Business Research, the at forecasts that 13% more haulage firms wi bankrupt this year compared with 2000.