So desperate is the atmosphere in the Parliamentary Labour Party that no sooner had hauliers begun their slow trundle through central London yesterday than a number of jittery MPs were reaching for the white flag. There have been calls from several backbenchers, terrified by last week's rejection of Labour by the voters of Crewe and Nantwich, for the Government to postpone the scheduled 2p tax rise in fuel duty still further.
We have been here before. When aggrieved hauliers and farmers blockaded fuel depots in 2000, Gordon Brown, as Chancellor, acquiesced to their demands by freezing the fuel duty. He must not make the same mistake again.
This is the defining test for the Prime Minister's green credentials. As tempted as he will be to alleviate at least one of his political headaches, Mr Brown must reject calls for a suspension of the tax. The Prime Minister presents himself as a leader who is making the right "long-term decisions" for the country. There are few issues more firmly in the UK's long-term interests than reducing our carbon emissions.
Suspending the 2p tax rise would be sheer populism. It would do nothing to address the underlying cause of the pain of haulage firms, which is a massive growth in the demand for fuel from Asia and dwindling global supplies. The idea that it is in the Government's power to control the global price of a barrel of oil is one that needs to be exposed as nonsense, not indulged. A tax suspension now would also heap up pressure for future suspensions, undermining the very purpose of the Government's fuel tax escalator.
This protest has coincided with a growing clamour for the latest vehicle excise duty reforms to be rolled back. It is unfortunate that the Government is attempting to apply these new tax bands retrospectively. People who are hit with an increase after purchasing a particular model of car have grounds for feeling aggrieved. But the underlying principle of the reform is absolutely correct. The public need firm incentives to buy less-polluting vehicles.
Of course, the problem is that the Prime Minister has a credibility problem. His "green" levies are widely regarded as disguised stealth taxes. The Government has not done itself any favours on this front in recent months. Mr Brown has tarnished his reputation for fiscal prudence through his desperate manoeuvrings over the 10p income tax rate. There is thus a reasonable question about where the funds raised by these taxes will be going: to projects that will promote low-carbon technologies and greener transport, or merely to fill a black hole in the Government's finances?
Yet it would be a mistake to focus on this issue in national terms. The pressure for acts of populism on fuel and tax are being felt not just in Britain but around the world. French fishermen have blockaded oil depots. Spanish lorry drivers are threatening to go on strike over fuel prices. This pressure is already having an effect. Two of the remaining US presidential candidates, John McCain and Hillary Clinton, have backed a summer fuel tax "holiday" for American drivers. And yesterday the French President, Nicholas Sarkozy, proposed a Europe-wide cut in fuel VAT.
If we travel down this road, we will have no chance of mitigating global warming. We will never break our economies' destructive addiction to fossil fuels, or see cleaner technologies developed, if governments intervene to make petrol and diesel cheaper.
Mr Brown used to talk about the virtues of courage. It is time for him to demonstrate some of that quality by holding firm over fuel tax.Reuse content