George Osborne should reverse the VAT rise on fuel – my article in The Sun

Driving into the garage to fill up the car has become staggeringly costly for millions of families across the country.

I saw it myself last week – filling up our Ford Mondeo estate cost over £70, much more than it did before Christmas.

At a time when people on low and middle incomes are already facing a tough year of rising taxes and job cuts, the rising cost of petrol is really starting to hurt.

That’s why The Sun is right to campaign for a fairer deal for motorists. And it’s why I’m calling on the Chancellor George Osborne to act now to ease the pain.

We all know that the revolutions in Egypt and Libya have driven up oil prices round the world. But there are four things George Osborne can do now.

First, he should say he got it wrong on the VAT rise on fuel.

Labour said that hiking up VAT to 20 per cent was the wrong tax at the wrong time. It’s hurting families, businesses and our fragile economy.

At a time when world oil prices are already rising, George Osborne’s VAT rise has added nearly 3p to the price of a litre of petrol.

New figures I’ve uncovered from the House of Commons Library show that the Treasury is getting an extra £700m from the higher VAT on petrol.

And while George Osborne has given the banks a tax cut compared to last year, they are now going to pay £800m more than this government was planning.

So I say the Chancellor should use that extra money from the banks to reverse the VAT rise on petrol. He doesn’t need to wait until the Budget – he should act now.

Second, in the Budget next month he should look again at the annual fuel duty rise due in April. The last Labour government often postponed planned duty increases when world oil prices were on the up – as they are now.

And if George Osborne doesn’t deliver on the ‘fuel duty stabiliser’ he pledged before the election, that will be yet another broken promise from this Tory-led government.

Third, at a time of instability and change in the Middle East and North Africa, he must work with other finance ministers across the world to make sure the supply of oil keeps flowing and get world oil prices down – now and for the longer-term.

Finally, the Chancellor needs to come up with a plan to get our stalled economy moving again and get more people into work paying taxes. That’s the best way to get the deficit down and ease the pressure on families facing the squeeze.

But it would be a good start if he acted now on VAT and used money from the banks to cut the price at the pumps.

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Posted February 28th, 2011 by Ed

One Response to “George Osborne should reverse the VAT rise on fuel – my article in The Sun”

  1. John Gunning says:

    The 1p drop in the petrol tax was a gross insult to motorists, and will do nothing to help reduce the soaring cost of living. A 10p drop would be the least we should accept, 20p would be better and would have made sense. As it is, by this action of lowering the tax by 1p, the government has lost all credibility, and George Osborne should resign forthwith.

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