Select Committee on Northern Ireland Affairs Appendices to the Minutes of Evidence


Memorandum submitted by IBEC/CBI Joint Business Council

  I am writing on behalf of the IBEC/CBI Joint Business Council to confirm our support for the case to reduce Excise Duty on motor fuels in Northern Ireland to a similar level applying in the Republic of Ireland.

  The reasons for supporting such a measure are, to a large extent, self-evident but can be summarised as follows:

    —  The fact that Northern Ireland has a land border with the Republic of Ireland and duty and taxes on motor fuels in the UK amount to approximately 82 per cent of the pump price and only approximately 66 per cent in the Republic is creating a major trade distortion between the two markets in favour of the Republic;

    —  The consequences are a catastrophic loss of business for service station operators and their suppliers in Northern Ireland, the loss of a vital service for many local communities and a loss of as much as £200 million for the UK Exchequer in 1999;

    —  The overall loss of trade to border towns in Northern Ireland, which is being driven in its entirety by this price distortion, has far-reaching consequences for all traders in these communities, quite simply because people travelling south for motor fuel purchase a great deal of other items that would otherwise be bought in the north as well;

    —  The price differential between the two markets is leading to widespread smuggling with consequential implications of a most serious nature for the people of Northern Ireland.

5 May 1999

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