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Monday, 23 October, 2000, 07:26 GMT
CBI urges Brown to cut fuel tax
Fuel protests nearly brought the UK to a halt
Business leaders are calling on Chancellor Gordon Brown to cut fuel duties for road hauliers as part of a 3bn package of measures to reduce the industry's tax burden.

The Confederation of British Industry (CBI) has put forward a three-pronged strategy for reducing the cost to business of road use.

There is a case for carefully targeted tax cuts to mitigate the business cost problems

Kate Barker, CBI
It says companies are increasingly concerned about the growing taxation burden on business, which it estimates has risen by 5bn a year since Labour came to power.

It is widely expected that Mr Brown will make his pre-Budget report to the House of Commons within weeks - before the 60-day deadline to act to reduce fuel duty set by protesters.

On Sunday a report from accountants Ernst and Young's economic forecasters predicted that the chancellor would have a 16bn surplus to play with by the end of the financial year.

'Brit disc' proposal

The CBI is calling for the partial replacement of vehicle excise duty (VED) paid by hauliers, with a special charge to be paid by all lorries, including those from overseas.

The idea, sometimes known as "Brit disc", is intended to make it easier for British hauliers to compete with those from the Continent, where VED rates are lower.

Gordon Brown
Gordon Brown is preparing his pre-Budget statement
In addition, the CBI is calling on Mr Brown to consider reducing VED and tax on diesel and to undertake a review of the way taxation on the fuel is index-linked.

A radical review of the whole system of transport taxes is needed, according to the CBI, if the government is to help deliver economic and environmental goals.

Low investment warning

Other proposals by the organisation would affect all businesses.

They include re-examining the working of the proposed Climate Change Levy, and considering changes to National Insurance contributions, stamp duty and the double tax relief regime, as well as the fuel duty measures.

The CBI's chief economic adviser Kate Barker said: "Mr Brown has large spending increases already in the pipeline and little room to manoeuvre without stoking inflation.

"But there is a case for carefully targeted tax cuts to mitigate the business cost problems.

"We are very concerned about low levels of planned company investment. This could impact on future economic growth unless tax policy starts moving in the right direction."

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See also:

22 Oct 00 | Business
Economists call for tax cuts
17 Oct 00 | Business
Business urges cut in vehicle duty
13 Oct 00 | UK Politics
Brown 'offers fuel concessions'
21 Sep 00 | World fuel crisis
UK fuel tax: The facts
14 Sep 00 | Business
Could the government cut fuel duty?
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