I KNOW high fuel prices are hitting people hard, just at the time when families, pensioners and businesses are already being squeezed by higher food prices and rising gas and electricity bills.
The independent House of Commons Library says the Treasury will get an estimated extra £74m from drivers in the North West from the Tory VAT rise.
The hike in VAT to 20 per cent has added nearly three pence to the price of a litre of petrol – or £1.35 to the cost of filling up a 50 litre tank – but could be reversed using an extra £800m from the bank levy
It is now clear that the Government’s decision to increase VAT to 20 percent in January 2011 was a serious mistake.
I have supported, and will continue to support, measures in Parliament to ease the burden of high fuel prices.
Raising taxes and cutting spending too far and too fast has put Britain back into recession.
We have seen no growth for over a year, and youth unemployment pushed to record highs – and all of this well before the crisis in the Eurozone. The result of this slower growth and higher unemployment also means £150 billion more borrowing than the Government planned.
That is why I believe the Government needs to take urgent action now to help ease the squeeze on struggling families and jump-start our stalled economy. I have urged the Government to temporarily reverse the VAT rise – cutting it back down to 17.5 per cent.
Chancellor George Osborne could and should have taken this action in his recent Budget. Cutting VAT would not only have had an immediate effect on the price of petrol, but also on the cost of many other things families rely on. In fact, it would save a couple with children an average of £450 a year.
I voted to make this change but, unfortunately, the Government blocked it, and kept VAT at 20%, which has kept petrol prices high and hit economic growth.
The VAT cut, which would help to immediately reduce the cost of petrol, is part of our Labour’s Five Point Plan for Jobs, which includes a tax on bank bonuses to support 100,000 jobs for young people, and tax breaks for small businesses taking on extra workers.