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Foreign embassies "can't pay, won't pay" C Charge - Burstow
November 7, 2005 4:00 PM
A diplomatic wrangle has erupted between the Foreign Office and diplomats from around the world over their refusal to pay the Congestion Charge, according to a statement from the Foreign Secretary to Liberal Democrat London Spokesman, Paul Burstow MP.
In an answer to Parliamentary Questions from Paul Burstow MP, Jack Straw revealed a number of foreign embassies representing countries around the world are contesting their liability for Congestion Charging, citing immunity under the Vienna Convention in their defence.
The embassies in question dispute the congestion charge as they claim it is a tax, which they are immune from under international law.
Paul Burstow commented:
"This dispute has been going on for far too long. Thousands of pounds of unpaid charges and fines must have been clocked up by diplomats saying 'cant' pay, wont pay'.
"It's time the Foreign Office steps in and settles this matter once and for all, to stop diplomats hiding behind the Vienna convention to avoid paying the charge.
"How can it be fair to those who have to pay the charge for embassy staff to hide behind diplomatic immunity refusing to pay the charge and escaping the fines."
Notes to editor
1. Parliamentary answer to Paul Burstow MP (Hansard, 26 Oct 2005 : Column 466W)
Mr. Burstow: To ask the Secretary of State for Foreign and Commonwealth Affairs in respect of which countries' diplomatic missions he has had (a) discussions, (b) meetings and (c) correspondence regarding a refusal to pay the congestion charge citing (i) Article 34 and (ii) Article 49 of the Vienna Convention. [20668]
Mr. Straw: Prior to the introduction of the Congestion Charge, I had representations from the Danish and Spanish Embassies and corresponded with the Deans of the Americas, Arab, Asian, Caribbean, Latin American and Pacific Groups. Following the introduction of the Congestion Charge in February 2003, I have had representations from the African Union Group, who also met with my officials, as well as correspondence with the Bulgarian, Swiss, German, Moroccan and US Embassies.
2. Under article 49 of the Vienna convention, embassies are exempt from paying any form of direct taxation
3. Notes from an Organisation for Economic Co-operation and Development (OECD) meeting in September 2003 reveal that the Government has insisted the Congestion Charge is a service charge and not a tax.
Point 16.
"A further development however has been the government coming to us to explore whether activities could be treated as market and the unit running them as a quasi corporation. One example is the London congestion charge - there are similar charges in some other British cities. This could have been seen as a source of tax revenue if the money had gone in to a general fund for spending on the full range of services. However the legislation specifies that the income from the congestion charge can only be spent on a limited range of transport related items in London. Transport in London is organised as a number of real and quasi public corporations owned by local government in London. These provide market services to users of London's transport including underground trains and buses. We see the road charge scheme as an additional market service provided by them. There is cross subsidy between different categories of user but this is common in the provision of services in the private sector. The congestion charge is therefore a service charge not a tax because of the ring fenced accounting inherent in the scheme. This is also consistent with the national accounts manuals where the Eurostat Manual on Government Deficit and Debt, which is consistent with ESA95, cites road and bridge tolls as examples which should be treated as payments for the provision of services."
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