Boris wants fuel duty stabiliser

Monday, 24 January 2011 12:00 AM

By politics.co.uk staff

London mayor Boris Johnson has made the case for a fuel duty stabiliser, pressuring the government ahead of this spring's Budget.

Fuel duty is set to increase by one per cent above inflation each year from April 2011 to April 2014.

Ministers have already admitted they are considering addressing spiralling fuel costs by introducing a fuel duty stabiliser, in what would be a major relief for motorists currently facing a record high tax on their petrol.

A stabiliser would ensure an automatic freeze on fuel duty increases and a reduction in duty to match any increases in VAT revenues from higher pump prices.

"If I were the government, I would think seriously about that fuel duty stabiliser, because when it costs more to fill your tank than to fly to Rome, something is seriously wrong," Mr Johnson wrote in an article for the Telegraph newspaper.

He said that the current price "clobbers" small business and makes it "very tough" for people living in rural areas without good public transport links.

"Petrol is cheaper in virtually every other European country than it is in Britain," Mr Johnson added.

"Whatever the reason for the recent spikes, we cannot get around the fact that the spikes are jabbing the consumer all the more painfully because the Treasury takes about 60% of your fuel bill in excise."

The Conservative party had pledged to introduce a fuel duty stabiliser before the general election. Prime minister David Cameron said the government was looking at the issue earlier this year.

The Federation of Small Businesses warned in January that small firms, like hauliers and taxi drivers, would be severely affected - and would have to pass the VAT hike to 20% on to customers.

"It is imperative the government acts now and introduces the stabiliser to avoid a relentless flow of fuel duty increases that simply put small firms on a knife-edge," national chairman John Walker said.

Tags: