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Portillo: We Will Cut the Duty on Fuel

We have voted against the increases in fuel duty imposed by Gordon Brown in his last two Budgets and this Summer we launched a campaign against high fuel taxes. We also made it clear that we would make our tax announcements only when we were ready to do so and when it was appropriate", he said.

"Last week, while the fuel blockade continued, we urged the protestors to give up the blockade having made their point and we refrained from making any announcement of our own specific policy while the blockade continued.

Consistent with our stated policy, we believe that fuel taxes should be lower. It is clear that tax revenues from a number of sources are much higher than the Government estimated. Analysts believe the Chancellor has about £5bn more than he thought. It is perfectly possible to cut the fuel tax this year without any impact on Government spending or public services. Everyone knows that Gordon Brown has a war chest. He knows it. Analysts know it. The people know it. And I know it.

It is clear that at least 3p per litre or 13.6p per gallon, can prudently be taken off the tax on fuel. This would cost £525m for the rest of this financial year. A cut on this scale would mean that a family with a Ford Mondeo would save £1.85 every time they fill their tank.

We would not be in the hole that Gordon Brown is now in and we are not advising him what to do - not least because he doesn't listen to anyone anyway.

Indeed, it may be that the Chancellor, who is in possession of all the facts and figures, could and should make a larger reduction in fuel duty.

But we are saying today that if he does not make any reduction between now and the election we will implement this policy, once elected.

It seems likely that this can be achieved from higher than expected surpluses, the full year cost being £1.1bn according to the Government's own tax 'ready reckoner'. But we have, in any case, identified specific reductions in public spending well in excess of that number so that this tax cut can be sustained in the long term. And it because we will plot a course for overall public spending to grow less quickly than the economy as a whole, that we will be able to offer tax cuts for hard-working families, pensioners and businesses like this one.

The reduction that we propose is prudent, achievable and moderate and only dogma from a Government that no longer listening has led it to impose taxes at this level.

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