EU fuel tax plan revives row
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Your support makes all the difference.The simmering row over tax harmonisation in Europe was reignited yesterday when the European Commission proposed a single rate for excise duty on diesel used by hauliers in all 15 member states.
The plan – certain to be opposed by several governments including the UK – aims to end the disparity between fuel costs in different countries.
For Britain, which has the highest rate of any EU country, the commission's proposal would mean a cut of almost 50 per cent on duty for hauliers. The Treasury could lose billions of pounds of revenue – though EU officials point out that the UK loses revenue anyway, because truckers avoid refuelling here whenever possible.
Under the plan there would be a rate of €350 (£220) of duty per 1,000 litres of commercial diesel fuel, with harmonisation by 2010. At present, duty in the UK is €742 (£470), compared to €401 (£250) in Ireland and €372 (£235) in Luxembourg.
The commission also wants minimum duty of €360 (£225) on diesel and unleaded petrol for privately used cars. In several countries, diesel is taxed at a lower rate.
The Road Haulage Association welcomed the plan, which comes almost two years after fuel protests in Britain brought parts of the country to a standstill. Karen Dee, director of policy, said: "We have been campaigning for a long time about the competitive disadvantage of British hauliers."
But the Government is threatening to veto the idea, which requires support from all 15 EU countries. A British official said: "The Government does not accept that there are single market reasons to justify a harmonised rate."
Frits Bolkestein, European Commissioner for the internal market, said the UK would not lose revenue because the cut would raise demand for fuel.
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