UK braces for new fuel tax battle

Government talks tough as draft budget statement, protesters' deadline, near

With political tension rising ahead of a pre-budget statement by the UK finance ministry next week, the government warned yesterday that it would not give in to demands by hauliers, farmers and fishermen for big fuel tax cuts. Protesters almost brought the country to a standstill in September by blockading refineries and have threatened further action later this month unless their demands are met.

Prime minister Tony Blair told MPs that cutting fuel duties would either increase interest rates and mortgages and reduce scope for helping pensioners or lead to lower spending on public services. The finance ministry added that the cut of UK£0.26 (euros 0.45) per litre sought by the protesters would cost UK£11.8bn, equivalent to UK£0.04 on income tax. The government today announced further plans to prevent any renewal of blockades from stopping supplies of petrol and diesel.

Among blanket media coverage of the development, the government's tough line won support from the Financial Times newspaper. It accused the protesters of "astonishing arrogance" and urged the administration not to cut taxes next week but to start a broader process of rationalising the balance of energy taxation.

Environmental arguments for maintaining high fuel taxes have also started to gain greater prominence following recent weather extremes widely blamed on climate change (ENDS Daily 31 October), after being virtually invisible during September's protests.

Follow Up:
UK prime minister's office, tel: +44 20 79 30 44 33, and Mr Blair's comments to parliament; Financial Times, tel: +44 20 78 73 30 00, and editorial.

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