Government accused of stitch-up on shoe tariffs to protect opt-out

The British Government was last night accused of caving in to demands for tariffs on shoes in a "back-room deal" to protect its opt-out from European rules on the maximum working week.

Retailers said ministers were planning a U-turn on the objections to plans to impose a tariff of up to 16.3 per cent on shoes from China and Vietnam.

The British Retail Consortium said giving in to demands from shoe manufacturers in Italy, Spain and Portugal would put up the price of goods on the high street. Its Brussels director, Alisdair Gray, said: "This should not be about compromise terms, arm-twisting or dubious back-room deals."

The European Union has been split by demand from countries with major footwear manufacturing bases to impose taxes to counter a flood of cheap shoes from the Far East.

The European Commission decided to impose the tax after conducting an investigation, but the proposal appeared to been have sunk after most EU states including the UK voted against it. But a proposal from Austria has put the issue back on the table. An EU committee, called Commercial Questions, will debate it on Monday or Tuesday. If a deal can be brokered there, it would go to a committee of ambassadors which would draw up the details to be rubber-stamped by the European Council next month.

The BRC said it believed the UK was keen to get support for its opt-out from the Working Time Directive that includes the 48-hour week. Their stance has been weakened by European court judgments that have included on-call waiting time in the working week.

"It's clear the UK is coming under strong pressure to end its opposition in return for support over the individual opt-out to the Working Time Directive. We urge the UK Government to stand firm," Mr Gray said.

The TUC said the UK was under pressure to find a solution to the on-call problem as part of an agreement to phase out the opt-out to the 48-hour week. "The TUC does not believe there's any need for the opt-out, and if there's a phased-in process employers will be left wondering what all the fuss is all about," a spokesman said.

The EU has until 5 October to renew a temporary tariff regime put in place at the start of the year. That would see duties imposed for the next 12 months, rather than five years, with an evaluation of their effect before any extension.

On Wednesday, Austria unexpectedly suggested a one-year extension of the provisional customs duties introduced in April and to review them afterwards. Austria, which voted against the original five-year plan, appeared to change tack after the intervention of the Italian Prime Minister, Romano Prodi. Italy and other southern European states hope to return a part of the Far Eastern shoe production to their countries.