The UK has the Highest Fuel Taxes in Europe - So How Legal is That?

WEYBRIDGE, England, November 8 -- The Freight Transport Association and the Road Haulage Association have today (Tuesday) announced the scope of their investigation into the legal standing of the Government's fuel tax policy that has seen UK diesel fuel become the highest in Europe and cripple the UK road haulage sector.

FTA and RHA asked a leading city law firm to consider seven possible lines of legal challenge and the interim review has been published today. The review will inform the impending report of the Burns Inquiry into Freight Taxes and Foreign Competition that the two Associations commissioned earlier this year.

The seven aspects of fuel policy being investigated are:

1. Reverse discrimination

Is the Government guilty of imposing unfair tax burdens on its own citizens and businesses, leaving foreign hauliers at a competitive advantage?

2. State Aids

Given that the Government has failed to charge foreign operators for the use of British roads, is it guilty of using taxpayers' money to in effect subsidise the wear and tear caused to the network and in effect provide a financial subsidy to foreign operators?

3. Proportionality

Has the Government exceeded what is reasonable in its pursuit of managing demand for transport through taxation of fuel?

4. EU law

Is the European Commission guilty of failing to enforce a harmonised level of fuel duty across the EU, given the statements made in Directives and other policy documents?

5. Restrictions on the import of fuel in vehicle tanks

Should the volumes of diesel fuel that can be brought into the UK in vehicle fuel tanks aboard ferries and trains be limited on the grounds of safety and/or national security?

6. Cabotage limits

What are the implied limits and conditions imposed on foreign operators wishing to undertake national transport within the UK?

7. Crisis Cartel

Given the crisis that engulfs the British road haulage sector, have all the conditions been met whereby operators may work together to cartelise their rates and services, subject to notification and approval by the Department of Trade and Industry and the European Commission?

Commenting, James Hookham, Policy Director at the Freight Transport Association said, "Both Associations are leaving no stone unturned in their quest for a legal fix to the problem of high fuel taxes. The legal investigations being carried out for us will help give us confidence on the selected avenues that we decide to pursue on behalf of our members."

Karen Dee, Director of Policy at the Road Haulage Association said: "We all know that the road haulage sector is one of the most competitive. We need to be clear that our own Government and the European Commission are fulfilling their commitmentrs to ensure that that competition is fair."

The review will be submitted as part of the written evidence to the Burns Freight Taxes Inquiry, which is due to publish its report towards the end of November.

The Road Haulage Association - supporting the industry on which the UK depends.