Comment: Silent crisis looms over soaring fuel tax

Thursday, 13 October 2011 5:05 PM

Motorists are unfairly fleeced by a rip-off fuel tax that does nothing but damage to the UK economy.

By Robert Halfon

We are facing a silent crisis, as the cost of living is rocketing. Steadily, month by month, energy and petrol bills are crippling our economy. Figures from the Royal Automobile Club now show that the average motorist in my constituency of Harlow is getting fleeced for £1,700 a year just to fill up the family car. This is one tenth of the average local salary.

The Government defines “fuel poverty” as spending a tenth of your income heating your home, but what about spending a tenth of your income just driving to work?

Earlier this month, ex-Tesco boss, Sir Terry Leahy, blamed the catastrophic slump in retail sales on the cost of fuel. He told The Sun: 'I don't think people fully appreciated what an oil shock we've had. Filling up the family car has gone up 70% in two years, causing what was a steady recovery to go sideways'.

That is why I have tabled an e-petition calling for Cheaper Petrol, with the campaign group Fair Fuel UK. You can sign the e-petition here: http://epetitions.direct.gov.uk/petitions/347

We have now reached over 100,000 signatures on the e-petition, and today I applied for a full debate in Parliament, to get this issue on the Government's radar.

But the case for cheaper petrol is not just popular; it is good economics, too. Experts at the LSE have published research, showing that our soaring petrol prices are contributing to UK unemployment.

Added to that, the high price is creating a poverty trap, as people can't afford the costs of getting to work. In fact, petrol is now so hugely expensive, that it is costing the Government money. This is because fewer people can afford to drive, leading to lower tax revenues.

Figures from the AA show that the Treasury received £1 billion less in revenue from petrol taxes in the last six months, compared to 2008. If this is true, it is disastrous. We urgently need a study of petrol taxes, by the Treasury, to see whether high fuel taxes are actually making it harder to close the deficit.

Voters think so too. Rip-off petrol prices are one of people’s top concerns, according to Populus. To his credit, George Osborne has taken major steps to help, including a 1p cut in fuel duty and abolishing Labour’s “tax escalator”.

But we urgently need to do more. We need no new fuel taxes in this Parliament. The 4p duty rises that are planned for January and August 2012 must be scrapped, and the Government needs to pressure the oil companies to keep prices down.

Robert Halfon is Conservative member of parliament for Harlow.

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