Strasbourg Diary March 2004 by John Purvis, MEP

CHEAP CAR INSURANCE UNDER THREAT
Lower motor insurance premiums for women are under threat from proposed new laws under discussion in the European Parliament. Younger women can get much cheaper car insurance as they are seen as safer drivers by the industry. The proposals would make it illegal for companies to take into account differences between men and women when setting insurance premiums. This could mean car insurance premiums for these women could rise by between 10 and 15 per cent. Insurance is all about the assessment of risk and it should be left to individual businesses to decide what they will charge based on the risks as they perceive them, rather than on extreme political correctness. Just to even things up a bit, women over 50 are seen as higher risk drivers than men of that age!

BETTER TRANSPORT LINKS NEEDED - NOW
What the Scottish economy really needs, if it is to grow, is a transport system which will bring us up to European standards. Ensuring the efficient movement of goods, labour and services is one of the key drivers to economic success but we are not achieving that in Scotland. For example, the Forth Road Bridge is over its design limits every weekday, five days out of seven. At 40 years old, it needs a major makeover. At last new access roads are planned on the south side but there are no plans for access to the Forth Bridge spur from Linlithgow, Falkirk and Grangemouth. No exit is planned from the M9 spur towards Edinburgh and Leith, a useful alternative for freight from the Forth Valley to Leith docks. Reducing congestion and jams on the A8 and M8 and freeing communities from the daily parade of oil tankers making for the Forth Bridge would also improve the environment. As for the railways, European colleagues never cease to be amazed by how few of our Scottish railways are electrified. They would be faster, more reliable and less polluting. Surely the railways of Central Scotland and to the north should be the highest priority if railways are to be able to play a significant part in Scotland’s transport system. And while all welcome the new ferry service between Rosyth and Zeebrugge, without the supporting transport access guaranteed free of jams and periodic closures, it will always be at a disadvantage when trying to attract the all important freight and tourist traffic which will make it viable for the long term.

VAT STUCK ON POSTAL SERVICES
Despite the Economic and Monetary Affairs Committee, of which I am Vice Chairman, deciding to reject a proposal to abolish the VAT exemption for public postal services, the full Parliament voted to approve the European Commission’s proposal to put VAT on stamps. Postal services have been exempt until now. There will be very reduced VAT rates for standard services such as most private mail and some business mail. The matter has still to go before the Council of Ministers but it very much looks as if we are stuck with this. The reasoning goes that this will provide a level playing-field between the publicly owned postal services and the private sector couriers and, in some instances, already privatised post offices. As postal operators will now be able to recover VAT on their inputs, it is argued that this will barely affect the price of postage stamps. I remain to be convinced. Over to the regulators to keep postage prices under control.

WHISKY TAX IS SELF MUTILATION
Crime lords in China and Eastern Europe could well be preparing to make millions from selling duty-free whisky in the UK, according to the Scotch whisky industry. They will be able to do this by cracking a new security system using strip stamps applied to whisky bottles which is being proposed by the Chancellor. A new stage in the production process will have to be installed and will add to costs. The stamps are supposed to prove that tax has been paid. I have pointed out to Gordon Brown that tax avoidance in the UK on alcoholic drinks is almost entirely due to the rate being set too far out of line with neighbouring EU countries and that strip stamps will only further damage one of Scotland’s most important industries, particularly smaller producers. Foreign tourists in Scotland cannot believe the self mutilation caused by the level of tax on our home produce. This step is a disaster for the industry and for Scotland. And it amazes me and most Scots that a Scottish Chancellor should even consider such a scheme.

John Purvis is a member of the Committee on Industry, External Trade Research and Energy and Vice Chairman of the Committee on Economic and Monetary Affairs. He can be contacted by e-mail at jpurvis@europarl.eu.int or visit his website on www.scottishtorymeps.org.uk.

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