U-turn on motoring taxes?

Cabinet ministers have indicated the government is prepared to consider watering down controversial increases on road tax and fuel duty.

As hundreds of hauliers brought parts of London to a halt yesterday, Jack Straw and John Hutton said ministers were listening carefully to the concerns of motorists. The government is under pressure to scrap a 2p increase in fuel duty, due to come into force in October, and to reverse a £200 increase in vehicle excise duty on environmentally unfriendly cars bought during the last seven years.

Hutton, the business secretary, said the government had to be careful to avoid “hammering people”, while Straw said there was the possibility of a change when the chancellor, Alistair Darling, delivers his pre-budget report in the autumn.

A spokesperson for the Environmental Transport Association said: “The government cannot be held accountable for the increasing price of fuel, but it is behaving like a headless chicken when it comes to green taxes – we need a coherent and equitable system of environmental taxation and we need it now.”

The price of crude fell by $1 to $131 in London trading yesterday, after reaching a record $135 a barrel last week, but it is still six times higher than in 2002.

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