TaxPersonal TaxLooking beyond petrol

Looking beyond petrol

It's hard to believe a handful of protestors can bring the country almost to halt in a matter of days.

It will be weeks before life approaches normality, to adapt Tony Blair’s misjudged phrase, while the overall cost to business runs to hundreds of millions of pounds, according to the CBI.

In many respects the prime minister was right. Whatever the rights and wrongs of high fuel taxation, a government cannot change policy because of opposition from a vested interest group. A Budget – or pre-Budget report – is the time for that. And that report, according to Whitehall rumours, might be just six weeks away.

Whether or not Gordon Brown does relax fuel tax – or at least announce a review – there is more the government can do to avoid a repeat of last week’s crisis.

British industry is nowhere near as dependent on fuel as it once was.

Services now drive the economy. But services suffered at the hands of the petrol-starved transport system as the people delivering services were unable to fuel their cars.

But why in this day and age should that matter? Technology is reducing the need to travel, electronic procurement systems are reducing the need to deliver goods. An electronic fault in a car can be repaired by downloading software from the net.

A pre-Budget report for the e-economy could kill two birds with one stone.

As well as putting its faltering e-government strategy back on track, the government may also begin to convince a sceptical public that petrol isn’t the most important commodity in a 21st century economy.

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