Fuel tax cuts under fire

Petrol pumps ran dry in last year's protests

A cross-party committee of MPs has denounced fuel tax cuts announced after last autumn's widespread protests at high petrol prices.

The planned cuts - equivalent to a drop in revenue of £560m - are attacked as "politically motivated" by the Environmental Audit Committee.

I do think you need to give people very clear signals about what is happening

John Horam
Committee chairman

And the attack has been widened by committee chairman John Horam, who accuses Chancellor Gordon Brown of having a "now you see it, now you don't" attitude to green tax policy.

The Conservative MP for Orpington also claims that just four out of 21 government departments are taking environmental legislation seriously.

The criticisms come just two days before Mr Brown is due to deliver what's expected to be his last Budget before the general election.

It is also embarrassing for the government on the eve of a keynote speech outlining environmental policy by Prime Minister Tony Blair on Tuesday.

In his pre-Budget report last November, Mr Brown outlined a package of fuel duty cuts widely interpreted as an attempt to soothe motorists and hauliers' concerns.

Green incentives were also included in the package in the face of continuing pressure from environmentalists concerned at the contribution that car and lorry journeys make to global warming.

Mr Horam called government policy "confusing"

But Mr Horam said that, alongside last year's scrapping of the fuel duty escalator, the tax cuts were a "dangerous" decision that sent a "confusing and misleading" signal to the public.

"I do think you need to give people very clear signals about what is happening and you have gone from a situation where the escalator is stopped, which is dangerous, and now fuel prices are moving down, so it is confusing to the public," he told a London news conference.

'What are people to think?'

The committee report states: "We can only conclude that this move was politically motivated to address the concerns of the hauliers."

But Mr Horam welcomed an assurance from Treasury minister Stephen Timms that the government would reconsider the need for a fuel duty escalator in the light of any future sharp fall in the price of crude oil.

The committee chairman also criticised the government's handling of the climate change levy on industry.

He said the public viewed it as "another stealth tax on industry for its own sake".

Temporary cut

Last month, the government announced a cut in unleaded fuel duty starting from Budget day on Wednesday and lasting until 14 June.

It will match the cut of at least 2p-a-litre in ultra-low sulphur petrol (ULSP) signalled last November.

The move was prompted by supply delays that mean not all motorists have access to ULSP as predicted by Mr Brown.

But the Conservatives accused the government of panicking while the Liberal Democrats called the cut "a bribe to pacify motorists".