UK - Chancellor seeks global response to high oil prices and rules out duty cut
FT.com / World / UK - Chancellor seeks global response to high oil prices and rules out duty cut
By Christopher Adams,Political Correspondent
Published: September 14 2005 03:00 | Last updated: September 14 2005 03:00
Gordon Brown has ruled out cutting fuel duty to ease the impact of soaring oil prices on motorists, stressing yesterday that a global response was needed to stabilise crude oil markets.
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The chancellor used his Trades Union Congress speech in Brighton to make clear he viewed calls for lower taxes and threats by protesters to blockade refineries and stage motorway go-slows as a diversion from the main problem.
He said: "It is because we understand the problems faced by hauliers, farmers and motorists . . . that the first action we must take is to tackle the cause of the problem: ensuring concerted global action is taken to bring down world oil prices and to stabilise the market for the long term."
The Treasury argues that fuel duty comprises a smaller proportion of the forecourt petrol price, which has topped £1 a litre in the wake of Hurricane Katrina, than it did during the fuel crisis of five years ago.
Mr Brown is expected to continue to freeze fuel duty in his autumn pre-Budget report, leaving it lower in cash terms than in 1999. Freezing fuel duties costs the Exchequer about £600m a year, at a time when the public finances are already under pressure. The protesters threatening action, however, want a bigger gesture from the government.
The chancellor reiterated his view that Opec, the oil producers' cartel, should immediately increase production at its next meeting on September 19 in Vienna.
He stepped up criticism of the oil-producing countries, saying a lack of transparency about the world's reserves and plans to develop them undermined stability and contributed to speculation in oil markets.
The Treasury was likely to stick to its view that there should be an international response to high fuel prices, rather than cuts in domestic duty, a senior Whitehall insider suggested.
Hopes of a united front of European Union leaders were undermined yesterday as Dominique de Villepin, French prime minister, moved to head off the threat of protests by announcing rebates on fuel taxes for farmers.
However, Mr de Villepin's appearance in Rennes was marred by about 100 taxi drivers protesting over oil prices, claiming they were being left out by the state.
A government plan was announced on Monday to spend €400m (£269m) a year on cutting corporate taxes to ease the oil price burden.
By Christopher Adams,Political Correspondent
Published: September 14 2005 03:00 | Last updated: September 14 2005 03:00
Gordon Brown has ruled out cutting fuel duty to ease the impact of soaring oil prices on motorists, stressing yesterday that a global response was needed to stabilise crude oil markets.
ADVERTISEMENT
The chancellor used his Trades Union Congress speech in Brighton to make clear he viewed calls for lower taxes and threats by protesters to blockade refineries and stage motorway go-slows as a diversion from the main problem.
He said: "It is because we understand the problems faced by hauliers, farmers and motorists . . . that the first action we must take is to tackle the cause of the problem: ensuring concerted global action is taken to bring down world oil prices and to stabilise the market for the long term."
The Treasury argues that fuel duty comprises a smaller proportion of the forecourt petrol price, which has topped £1 a litre in the wake of Hurricane Katrina, than it did during the fuel crisis of five years ago.
Mr Brown is expected to continue to freeze fuel duty in his autumn pre-Budget report, leaving it lower in cash terms than in 1999. Freezing fuel duties costs the Exchequer about £600m a year, at a time when the public finances are already under pressure. The protesters threatening action, however, want a bigger gesture from the government.
The chancellor reiterated his view that Opec, the oil producers' cartel, should immediately increase production at its next meeting on September 19 in Vienna.
He stepped up criticism of the oil-producing countries, saying a lack of transparency about the world's reserves and plans to develop them undermined stability and contributed to speculation in oil markets.
The Treasury was likely to stick to its view that there should be an international response to high fuel prices, rather than cuts in domestic duty, a senior Whitehall insider suggested.
Hopes of a united front of European Union leaders were undermined yesterday as Dominique de Villepin, French prime minister, moved to head off the threat of protests by announcing rebates on fuel taxes for farmers.
However, Mr de Villepin's appearance in Rennes was marred by about 100 taxi drivers protesting over oil prices, claiming they were being left out by the state.
A government plan was announced on Monday to spend €400m (£269m) a year on cutting corporate taxes to ease the oil price burden.
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