Huge duty-free perks for pampered Eurocrats

EUROPEAN commissioners, including Neil Kinnock and Sir Leon Brittan, will continue to enjoy huge tax-free allowances when duty-free shopping is abolished in Europe next summer.

Under present arrangements negotiated by the European Commission with the Belgian government, the 20 commissioners have an annual duty-free allowance of up to 20,000 cigarettes, unlimited volumes of wine, 60 litres of pure alcohol, 5,000 litres of fuel for a first car, and 2,000 litres for a second car. The arrangements give commissioners similar perks to those enjoyed by thousands of diplomats around the world, who can also skip duty on luxury goods. More than 2,300 British diplomats, including 600 in Europe, are also exempt from paying duty.

Commissioners and other diplomats who use the full entitlement on cigarettes, whisky and petrol would save pounds 55,729 a year, compared with duty-paid products bought in Britain. Commissioners can choose from a Brussels showroom packed with tax-free luxuries and have the goods delivered to their preferred address.

The commissioners enjoy salaries of 618,750 Belgian francs (pounds 10,855) a month, or about pounds 130,000 a year, taxed at preferential rates. The European Commission yesterday confirmed the commissioners would retain their privileges but said they had "nothing to do with the abolition of duty-free shopping".

A spokeswoman for Mario Marti, internal markets commissioner, said the tax-free allowances were part of diplomatic privileges negotiated under international agreements. "The commissioners are considered diplomats and have the same status as diplomats all around the world," she said. "We would have exactly the same system that diplomats have in the United States."

But the exemption for commissioners has angered the transport and liquor industries, which face swingeing job cuts if the abolition of duty-free shopping goes ahead.

Ferry lines and airport operators, which rely on duty-free shopping for a substantial slice of their income, warn up to 140,000 jobs will be lost because of the abolition, 23,000 of them in Britain. Stena, the Swedish ferry line that gets a third of its income from duty-free, last week warned of 400 job losses. Transport unions will today stage a protest at an open day being held in Brussels by the company that arranges tax-free orders for commissioners, Belgian International Sales.

Brenda O'Brien, assistant general secretary of the Federation of Transport Workers' Unions, said: "We don't begrudge the commissioners their opportunity to do some tax-free pre-Christmas shopping. What we do find extraordinary is that the Commission has refused to examine the impact of abolishing duty-free on jobs."

A commissioner can save up to pounds 2.67 on a packet of 20 cigarettes, pounds 5.47 on a litre of whisky, 55p on a 69p litre of petrol and pounds 1.53 on a litre of wine.

News of the continuation of duty free perks is an embarrassment for Mr Kinnock, the transport commissioner, who has supported the abolition of duty-free shopping.

A spokesman for the office of Sir Leon Brittan, a non-smoker who drinks little, said: "They might have these allowances but Sir Leon definitely doesn't take advantage of them."