London, 22 Apr 2006.
For immediate release.

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Press Release

ABD Calls for a Sliding-Scale Fuel Tax to combat rising oil prices
As the price of a litre of motor fuel edges ever closer to £1.00 the need for the government to react is becoming urgent. Sky high fuel prices are a threat to the economy, slowing growth, aiding inflation and diverting financial resources away from other areas. In order to maintain the health of Britain's economy and to ensure that the country's 30 million drivers continue to benefit from affordable personal mobility, the Chancellor should look again at the way fuel duties are applied.
Tony Vickers, ABD's fuel tax spokesman said
"The U.K can do little to influence global oil prices but the Chancellor still has considerable control over domestic duties. Plans for road charging as an alternative to fuel duty are an expensive, long term fantasy. Action is needed now to stabilise fuel prices."
At present, the Treasury are the main beneficiaries of the oil price crisis. The huge profits made by the oil companies will yield a tax bonanza and fuel duty revenues are booming. By now the government are sitting on a nice little windfall. The ABD calls for a new sliding-scale fuel duty based on a percentage which falls as oil prices rise and increases when they drop in order to stabilise the cost of motor fuel at around 70 - 75p a litre. Although tax revenues may fall in the short term, the overall benefits of a stable fuel price and a strong economy would compensate the government with generally more sustainable and healthy tax revenues.
Vickers continued:
"In the long term the ABD would like to see fuel duties fall in real terms, they still account for more than 70% of the price of every litre we buy. Although we recognise that an immediate, drastic drop in fuel duties is an economic impossibility, it would be possible to add a deflationary bias to a sliding-scale fuel duty that would compensate drivers over time for the massive and unjust revenue increases heaped on motor fuel in the late nineties. The Chancellor has expressed concern about spiralling oil prices and the potential for damaging inflation. Here is a practical way in which he can deal with the problem.


Notes for Editors