§ Mr. Spearingasked the Chancellor of the Exchequer what proposals of the EEC, if adopted, would prevent a future Government of the United Kingdom from imposing taxes on fuel oils as a means of maintaining a viable coal industry.
§ Dr. GilbertIn the United Kingdom fuel oils are liable to revenue duty at 1p a gallon. In September 1973 a Commission proposal—aimed at the harmonisation of the structure but not the rates of excise duties on mineral oils—included a provision which would have the effect of exempting fuel oils from the harmonised duty. This exemption would436W be without prejudice to any subsequent Community provisions for the protection of the environment or for securing Community energy supplies.
Fuel oils are zero rated in the United Kingdom. A provision in the proposed Sixth Directive on VAT presented to the Council by the Commission in June 1973 would require fuel oil to be subject to VAT.
The Council has not yet considered either of these proposals, which would, of course, require the unanimous agreement of member States. Even if they were adopted as they stand, the United Kingdom would not be required to give effect to either of these proposals until fiscal frontiers between member States were abolished. In respect of VAT the United Kingdom has stressed that it must retain the right to apply zero rates where necessary.
§ Mr. Spearingasked the Chancellor of the Exchequer what proposals of the EEC, if adopted, will restrict his future freedom to impose what fuel taxes he thinks fit on petrol.
§ Dr. GilbertThe Commission's proposals for harmonising the structure, but not the rates, of the revenue duty on mineral oils, were submitted to the Council in September 1973. They envisage that member States shall be free to fix rates of duty, which may vary according to the physical properties of the oil or the use to which it is put.
However, these proposals also provide that member States may not, directly or indirectly, subject mineral oils to any indirect charge other than VAT and the harmonised duty, except when emergency measures are taken for the protection of the environment. The Council has not yet considered these proposals, which would, of course, require the unanimous agreement of member States. No existing proposals would affect the Chancellor of the Exchequer's freedom to vary rates of the existing revenue duty or VAT on petrol.