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Region hit by tax burden

The North East economy is shouldering an extra £85m fuel tax burden compared with London rates, new figures show.

The region is paying 74% more than the Capital per tonne of freight – a figure that is set to rise over the coming years as the Government plans to increase the pain for hauliers.

The data, compiled by the North East Chamber of Commerce (NECC), reveals the hidden cost of fuel duty to the region. It shows the amount the region pays to transport freight around the country is £4.16 per tonne, compared with just £2.39 in London.

The overall fuel tax bill for North East freight is a frightening £200m. With the Government pushing ahead with plans to increase fuel duty by a penny every year to 2013, this disparity is set to widen further.

Compared across all English regions, the North East fares badly with its tax burden 18% above the average – equivalent in cost to £31m in extra tax.

James Ramsbotham, NECC chief executive, said: “This is a stunning tax burden that our regional economy has to bear. Were we to pay tax per tonne at London prices it would save the region £78m annually.

“The Government has fixed an upward course for fuel duty which will heap an ever increasing burden on this region as it fights its way clear of the recession. That mindset has to change.

“We are calling on the Treasury to show greater consideration of the economic impact in the regions that a rise in fuel duty has. In addition, we want them to take a more flexible approach by reviewing fuel duty on an annual basis while bearing in mind the influence any increases will have on the future prosperity of the regions.”

Mr Ramsbotham added: “What compounds the problem for hauliers is the fact that fuel duty is, in essence, a double tax. The Government charges Value Added Tax on top of fuel duty which multiplies the burden for everyone, particularly those regions paying a disproportionate amount in the first place.”

The movement of freight is a significant element of the economy. Only the South West region endures a greater tax burden per tonne for fuel duty. The North East fuel duty contribution is 18% higher than the average for all English regions on a per tonne basis

This was posted in Bdaily's Members' News section by Ruth Mitchell .