Tax hike deepens fuel crisis

Growers and retailers seek to seek heating alternatives sooner than anticipated

Plans for a £6.5bn tax increase for gas providers have forced growers and garden retailers to seek alternative fuel sources sooner than anticipated. Gordon Brown announced the hike in the Government’s pre-budget report. It is the second huge rise in three years. Although it will have no immediate financial impact on growers, it highlights the pressure gas users are currently under, according to Bridge Greenhouses managing director Ben Smith. He said: “It simply puts more fear into those who are currently using gas.” In the past few months, Smith has seen glasshouse growers increasingly seeking alternative fuel methods. He added: “This tax hike has simply moved the process along a bit.” (HW, 20 October). Brown sought to justify the tax increase on the grounds that oil prices have jumped from $25 a barrel to $55, while returns on capital in the North Sea have nearly trebled to 40 per cent. The freeze on petrol, diesel and road fuel gas duties is to continue until March 2006 at a cost to the Treasury of £600m for the full financial year.

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