Fuel Tax increase to be scrapped?
Everyone is short of cash in January, so what better way to please the populace than to sting them with tax increases. They did it last year, with the increase in VAT to 20%, and this January 1st the Government are still on schedule to increase fuel duty by 3p (plus VAT) that will mean an extra £1.50 cost to fill up an average car. The Chancellor is also planning a further inflation-driven 5p rise in August 2012.
However, not all of the ruling party are happy with the current plan, and a motion was signed yesterday by more than 100 MPs, including 83 Conservatives (out of 116) and five Lib Dems.
The renegade MPs, led by Conservative Robert Halfon, MP for Harlow, not only want the increases in fuel duty to be scrapped but also want more help for people in the rural communities. Mr Halfon described fuel tax as an "issue of social justice… in rural communities which are being destroyed by fuel taxes." The point being, of course, that city dwellers can probably walk to a shop and buy bread, milk and toilet paper, but that country folk have to drive miles to the nearest bog roll emporium or else they end up stuck on the toilet forever.
The debate has also turned into a rich versus poor debacle, although some might say you could argue that more rich people live in the country than in inner cities. “My argument is that we should cut taxes for millions of people across the country rather than for millionaires,” Mr Halfon said last night. This view point was backed up in various reports showing unequivocal evidence that the poor pay out more of their income in fuel duty than the rich. It’s like the rich just have more money to start with.
Quentin Willson, the TV presenter and spokesman for FairFuelUK, said: "Only someone on mind-altering medication would suggest piling yet more financial pressure on an economy that's already crumbling to the touch.
"Fuel duty in the UK has become a trojan horse that's corroding the economy from within. We need a cut, not another rise."
While not binding on the Government, this strong backbench revolt could cause Ministers, and specifically the Chancellor George Osborne, to stop and think whether the increase is the best way to welcome in 2012. Given that the Treasury are claiming that to scrap it would cost £1.5billion, and there is no Budget due between now and January, a climb down may be unlikely, but we can only cross our petrol tanks, wait and see.