Brown rules out cut in fuel duty as drivers carry on queueing

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The Independent Online

Gordon Brown yesterday ruled out a short-term reduction in fuel duty as motorists queued for petrol at filling stations up and down the country, writes Jo Dillon, Political Correspondent.

Gordon Brown yesterday ruled out a short-term reduction in fuel duty as motorists queued for petrol at filling stations up and down the country, writes Jo Dillon, Political Correspondent.

As oil companies made thousands of deliveries, getting fuel supplies back to the pumps after a week of blockades, there were no signs that the row over petrol prices would be quickly resolved.

Mr Brown, the Chancellor of the Exchequer, blamed the "short-term volatility" of oil prices for the latest hike in the cost of fuel, but said he would not bow to pressure to cut tax at the expense of key public services.

"I accept that if people had a choice between paying higher petrol prices or lower petrol prices they would choose lower petrol prices, but I also accept that we need to do more to get Opec to get the world petrol price down," Mr Brown told BBC Radio 4's Today programme.

"Of course when people look at the thing in the round they will say, look, we must finance our public services and they will also say we don't want to make long-term decisions for the country on the basis of short-term volatility of fuel prices. That is exactly the short-termism that did so much damage in the past."

The Chancellor continues to insist that although there is "a problem" in the haulage industry and farming, the fuel protest did cause a national crisis. But the Government is planning action in an attempt to avoid further demonstrations.

One option being considered by the Treasury is a plan to "freeze" fuel duty next year - an idea likely to be trailed in November's pre-Budget report. The concession would be to leave fuel tax unchanged, which would save customers 2p a litre and cost the Treasury £1 billion.

But the hauliers said the concession fell way short of their demands. One group, British Hauliers Unite, is now threatening to reimpose the blockade by Wednesday if the Prime Minister, Tony Blair, refuses to meet them to discuss their grievances. Downing Street last night said that ministers would be available for meetings but Mr Blair would not.

A Cabinet task force headed by Jack Straw, the Home Secretary, is also looking at practical ways of averting protests similar to the one that brought the country to a halt last week.

A report by the oil companies made it clear that they had no control over tanker drivers because they were self-employed. One proposal is to bring in a new law to alter the contracts of self-employed workers in key industries to ensure that they continue working. Cabinet ministers are furious about the way the protest unfolded, saying they were powerless to use existing laws to stop picketing and secondary action.

The task force will also consider urgently the issue of fuel storage, having been alarmed by the speed at which protesters were able to shut down the British economy.

The Tories were swift to capitalise on the Government's autumn blues. Shadow Chancellor Michael Portillo said Mr Brown had learned nothing from the events of the past week.

"He personified a Government that is growing more remote and arrogant by the day," he said. "He has shown not a flicker of sympathy or empathy. He showed no understanding of what the crisis has been like for hospitals, for people trying to get their children to school or those trying to run businesses with high fuel prices but no fuel.

"The country will be shocked by his cold words and so will some of Labour's own backbenchers. Gordon Brown has pushed the price of fuel too high and in the process shown himself to be completely out of touch both with public opinion and with the needs of British business."

At a press conference yesterday, President Olusegun Obasanjo of Nigeria announced that the Opec countries plan to institute a mechanism to stabilise the price of oil.

"The mechanism will allow the Opec nations to automatically increase production when the price of oil reaches a certain level, and to reduce production automatically when it sinks below a certain level," the President said.

The levels mentioned by President Obasanjo were $22 and $28 a barrel. "Currently, the price is $28. Anything higher than that is regarded as too high." The mechanism is to be discussed in detail at the forthcoming Opec conference.