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Brown stands firm on fuel

Monday 06 November 2000 01:00 GMT
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Chancellor Gordon Brown today refused to bow to demands for a huge fuel tax cut, claiming it would lead to a return of the "boom and boost" economy of the 1980s.

Chancellor Gordon Brown today refused to bow to demands for a huge fuel tax cut, claiming it would lead to a return of the "boom and boost" economy of the 1980s.

Mr Brown told the Confederation of British Industry that cuts as high as 26p a litre, as called for by protest groups, were unaffordable.

And he insisted higher interest rates would follow almost immediately if fuel duty was cut.

At the conference in Birmingham, Mr Brown said the average mortgage holder was around £1,000-a-year better off because the cost of borrowing over the past three years had been on average 4 percent lower than it had been over the previous two decades, all of which would be jeopardised by big tax cuts.

Addressing the CBI ahead of Wednesday's pre-Budget report, he said there must be no return to the "short-termist" economics of the 1980s.

"With our prudence matched by higher productivity, Britain can grasp the great interest rate prize that has eluded us for a generation - a long-term future of low and stable interest and mortgage rates upon which people can rely and business can plan ahead," he said.

"But this would all be put at risk if unaffordable demands such as for cuts in fuel duties of up to 26p were met on Wednesday with interest rates rising soon after."

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