Monday, 21 March 2011 06:47

Action on fuel tops Budget agenda

Written by  Ruralcity Media
Action on fuel tops Budget agenda

SOARING fuel costs are taking centre stage as Chancellor George Osborne prepares his Budget for Wednesday (23 March).

Earlier this month, Mr Osborne used a speech to the Tory spring conference in Cardiff to hint that he would use the Budget to cut fuel duty.

But a Labour motion to reverse the government's VAT rise on petrol and diesel was defeated in the House of Commons on 16 March.

The motion – calling for immediate relief for motorists – was defeated by Conservative and Liberal Democrat MPs who joined forces against it.

The hike in VAT to 20% in January has added nearly 3p to the price of a litre of petrol – or £1.35 to the cost of filling up a 50-litre tank.

Rural motorists are among those hardest hit by high fuel prices – not least because of limited public transport in the countryside.

Labour believes the VAT hike on fuel could be reversed using an extra £800m from the bank levy.

Shadow rural affairs secretary Mary Creagh said the VAT rise had hit hard-pressed and helped to push up petrol prices to record levels.

"People understand why world oil prices around the world are going up, but the Chancellor George Osborne has made things worse by putting up VAT.

"I'm disappointed that Conservative MPs have missed an opportunity to put right part of their mistake on the VAT rise.

The Tories voted against using extra money from the bank levy to give some immediate relief to hard-pressed motorists."

Meanwhile, calls are increasing for the government to look again at the annual fuel duty rise due in April.

The last Labour government regularly postponed planned duty increases when world oil prices were on the up, claimed Mrs Creagh.

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