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Liberal Democrat leader Charles Kennedy has called on the government to cap fuel taxes for five years.

The government is taking a lot - it's not giving nearly as much
No wonder public confidence collapses

Charles Kennedy
And he pledged his party would tax oil companies' excess profits if they failed to ensure fuel supplies.

Mr Kennedy was making an emergency statement on the fuel crisis at his party's annual conference in Bournemouth.

He said: "Fuel tax policy has to be fair - if it's not, it won't work. Let's be upfront about the environmental agenda."

Key measures

The Lib Dem leader called on the government to take four measures:

Cap fuel taxes for five years in real terms so it would not profit from future increases in oil prices.

Use the VAT windfall received from the higher-than-expected fuel price to ease the burden on the travelling public.

Ensure oil companies recognise their social responsibilities in terms of price and supply security. "If they fail to do so, we would take measures to tax their excess profits," he said.

Support people in rural communities who rely on fuel, for example by providing rate relief on rural fuel stations and investment in public transport.

'Honesty the key'

The Liberal Democrats have stressed many times that honesty should be the key to a government's taxation policies.

Mr Kennedy said last week could have been a defining moment for the country.

A society which is social democratic cannot be governed on the basis of who has the loudest voice, but the protesters knew this, he said.

"Democracy demands trust... it's a two-way street. You've got to give as much as you take. The government is taking a lot - it's not giving nearly as much. No wonder public confidence collapses," he said.

People power here to stay - Taylor

In his conference speech, Liberal Democrat Treasury spokesman Matthew Taylor branded both Labour and Tory reactions to the crisis as "old politics" by "politicians trying to fool the electorate".

He said: "People have just begun to learn they can take the power back from the politicians. In some ways it is frightening, disruptive. But above all, it is seductive - once discovered, they won't let it go.

Britain had been brought to a virtual halt not by saboteurs or a pressure group, but by "pretty ordinary working people, who got fed up and decided to do something about it.

"And like it or not - and I'm not pretending everything at the refinery was lovely - they struck a chord with the population at large."

"People power is here to stay. I believe we must be part of that revolution."


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