Overseas lorries may have to buy 'Brit disc'

Foreign lorry drivers may be forced to buy a special "Brit disc" to operate in this country under plans being considered by the Treasury to stave off another round of fuel protests.

Foreign lorry drivers may be forced to buy a special "Brit disc" to operate in this country under plans being considered by the Treasury to stave off another round of fuel protests.

The idea - which is aimed at deterring foreign hauliers who fill up with cheaper diesel abroad, pay no UK tax, and are then able to undercut British firms - is one of several being considered by Gordon Brown, government sources confirmed.

Pressure on the Chancellor to ease the burden on British hauliers and farmers increased yesterday when the oil industry indicated that prices will soon rise because of the Middle East crisis. The Tories pointed out that if the price of Brent crude went higher than its present $35 a barrel, the Treasury would be able to afford across-the-board cuts in fuel duty through North Sea oil income.

The "Brit disc" proposal, which is similar to one put forward by William Hague last year, had been dismissed by officials because of fears that it would be illegal under European Union law. But Treasury insiders believe one way round the problem would be to allow British firms to buy their annual disc at a lower price than those on sale at ferry ports.

It is one of several ideas being considered ahead of Mr Brown's pre-Budget Report on 31 October in which he will try to avert a repeat of the fuel protests last month that brought much of Britain to a virtual standstill.

A twin-track strategy is being pursued by ministers to direct help towards farmers and hauliers, while improving contingency plans in the event of a further blockade.

Stung by suggestions that he had appeared "high handed" during the protests, Mr Brown has attended meetings with hauliers and other groups in the past few weeks. He travelled to Leeds last week with Lord Macdonald of Tradeston, a Transport minister, to hear the concerns of a group of 10 hauliers. Both John Prescott, the Deputy Prime Minister, and Stephen Timms, the Financial Secretary to the Treasury, have had meetings with freight groups.

Whitehall officials point out that key decisions have yet to be made, but it appears thatthe main demand for an across-the-board cut in petrol duty for all motorists is unlikely. A simple 2p cut in fuel duty would cost the Treasury £1bn a year and Mr Brown is not prepared to go that far.

Instead, ministers are considering a range of specific measures, including a "blue diesel" scheme to dye fuel and sell it to hauliers at a reduced duty rate. A "secure" credit card for hauliers, allowing them to buy fuel at a discounted rate, as well as a new system of tax rebates and cuts in lorry vehicle excise duty, are also on the table.

However, if the protests do return, Tony Blair will be hoping that this time the machinery of government will be better placed to react with an effective response.

Jack Straw is co-ordinating efforts to improve police intelligence, but the trade unions could once again prove invaluable in helping ministers find out the picture on the ground.

Activists from the Transport and General Workers' Union, which has several thousand lorry drivers in membership, have infiltrated meetings of hauliers to gain the latest intelligence on their plans. They have discovered that the drivers may use different tactics in a new blockade, picketing power stations and supermarkets as well as oil refineries.