TaxPersonal TaxBrown opposes EC’s fuel tax plan

Brown opposes EC's fuel tax plan

A European Commission proposal to standardise the tax rate on fuel across the European Union has been met with strong resistance from the UK Treasury.

An EC White Paper published on Wednesday called for petrol and diesel taxes across the continent to be standardised at the average level for all 15 member states.

This would see the cost of unleaded fuel in the UK drop by 7p a litre from 78p to 71p costing the Treasury Pounds 4 billion a year.

But the proposal has met with strong opposition from chancellor Gordon Brown. A spokesman said: ‘We do not believe in tax harmonisation. The setting of taxation rates is a matter for individual member states, not the European Commission.

‘The chancellor has already delivered a substantial and targeted package of measures to reduce costs to the motorists.’

This is despite the fuel tax protests last year that almost derailed the government.

The EC says that with the road haulage market now fully opened up for competition the absence of harmonised fuel taxes is an obstacle to the internal market with the petrol and diesel duties ranging from 20p a litre in Greece and 50p a litre in the UK.

A spokesman for the Road Haulage Association welcomed the move and urged the chancellor to accept it.

But the chancellor’s spokesman said the White Paper also proposed road tolls for lorries in the UK which he did not believe the RHA would back.

The proposal causes major problems for the Tories who are opposed to tax harmonisation but in favour of cutting UK tax levels to European levels.

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