The Chancellor should use this week’s Autumn Statement to cancel the government’s new year 3p per litre petrol tax rise that will hit local people hard when it comes into force on 1st January 2013.
At a time when the cost of living is rising, our recovery is fragile and this out of touch government is giving 8,000 millionaires an average tax cut of over £107,000, it cannot be right to hit middle and low income families and small businesses with another tax rise.
The price of petrol is now more than £1.36 a litre, a massive rise of 15p since the Tories came to power. People in Birmingham are already feeling the squeeze from the government’s VAT rise – which has added 3p to the price of a litre of petrol – and deep cuts to things like tax credits. Delaying January’s fuel duty rise, at least until April, would provide some much-needed financial relief.
The government could pay for this move by clamping down on identified tax avoidance loopholes. For example, there is a growing problem with some employment agencies forcing workers to become employees of an umbrella company. They then falsely inflate the worker’s travel and food expense claims, reducing tax and national insurance, and pocket the avoided tax as profits.
HM Revenue and Customs has forecast that these schemes cost the exchequer £650m a year but more recent estimates have put it as high as £1 billion a year. Delaying the fuel duty rise until April 2013 would cost around £350m.
It’s really disappointing that last month Tory and Lib Dem MPs voted in the House of Commons against our plan to stop the new year fuel duty hike.
In a recent survey the consumer organisation Which? found that rising fuel prices are the number one consumer worry, with people saying that they are already having to cut back and dip into savings just to get by. Of those surveyed, 85% responded that they are concerned about rising fuel prices.
The Chancellor should start listening to people’s concerns and use his Autumn Statement this week to stop the new year fuel rise.
I will keep urging the government to change their minds and not hit local families and businesses so hard at this very difficult time for our economy.
