Petrol price row deepens

A national boycott of petrol pumps is planned for 1 August

The prime minister has come under fire after delivering a "pay up or shut up" message to those campaigning against high petrol prices.

Motoring groups attacked Mr Blair's claim that lower petrol duty would mean less money for schools and hospitals as misleading - saying fuel was being taxed at a higher rate than champagne.

In the three years of Labour rule with a 40% increase in fuel price since then, 32% is actually due to tax

Petrol Retailers' Association

Mr Blair fuelled the row over petrol costs when he used a Sunday newspaper article to deliver a blunt message to those wanting to cut prices, saying cutting duty by 2p would cost the Treasury £1bn.

"It's easy for campaigners to put up signs outside garages saying so much goes to the Treasury.

"But you don't hear them talking about putting up signs outside hospitals saying the number of nurses and doctors will have to be cut because the government doesn't have enough money.

"Or signs outside schools saying lack of cash has forced a halt to the repair programme which has helped 11,000 schools."

Tony Blair: Blunt message

But Edmund King, director of the RAC Foundation, described Mr Blair's remarks as "disingenuous".

He said the Treasury had already received a multi-billion windfall because steep rises in petrol prices meant extra VAT for the government.

"This is not money the Chancellor has banked on for schools," Mr King said, adding that it was an "affront" to motorists to have to pay up when they already paid billions per year.

He said UK motorists paid higher taxes on fuel than any other European Union country, with London having the third most expensive petrol prices out of 74 cities studied by the Economist Intelligence Unit.

Dump the Pump

Transport Minister Lord Macdonald said high fuel prices were a consequence of rising oil prices around the world

But the Petrol Retailers' Association accused Mr Blair of "deceiving" motorists who had voted for Labour on a pledge of no tax increases and said his remarks "insult the intelligence of the motorist in the UK".

Director Ray Holloway said: "Everyone wants better services, of course they do, but it's a question of openness.

"In the three years of Labour rule with a 40% increase in fuel price since then, 32% is actually due to tax."

Mr Blair's message came ahead of a nationwide petrol boycott of garages - "Dump the Pump" - planned for 1 August.

Motorists are being asked to refuse to buy petrol or diesel on that day and to repeat the exercise every week until prices and taxes come down.