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Cut fuel tax and introduce road tolls to cut congestion.

Tolls should be introduced on British roads to cut congestion and pollution following the backlash against high fuel taxes, a leading economist said last night .

Prof Andrew Oswald, of Warwick University, told an audience of MPs and London Assembly members that punitive rates of duty on petrol made sense for economic and environmental reasons.

However, public support for protesters blockading oil refineries showed the policy was unworkable, so economists in academia and the Treasury should 'get off their high horses' and seek other means of discouraging car use, said Prof Oswald.

He was speaking at a briefing organised by the university and held in its London offices, aimed at former students in business as well as politicians.

Prof Oswald said there was consensus among economists that high taxes on fuel were desirable.

Attempts to educate the public so they accept the need for high prices were unlikely to succeed, he said. European leaders should agree a common rate of duty, so that motorists in one country could not complain they paid higher taxes than those elsewhere.

This would probably mean reducing UK duty by ten pence a litre, creating a pump price of 70p rather than 80p. The Treasury would lose pounds 5 billion a year, but pounds 3 billion could be gained by levying steep taxes on aviation fuel and charging VAT on passenger travel.

He told his audience the remaining pounds 2 billion could come from heavier taxes on power stations using coal.

Calling for new means of cutting traffic congestion, Prof Oswald said: 'Road tolls are the future, they have the best chance of making our roads flow again.

'This would be good for firms' profitability, for people's marriages and stress levels, for the environment and especially for our grandchildren's wellbeing.

'Moreover, the money raised could be spent in useful ways such as reducing other taxes, including tax on fuel, and improving public services and infrastructure.'
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Publication:The Birmingham Post (England)
Date:Nov 30, 2000
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