UK Politics

Cut car fuel VAT now, says Shadow Chancellor Ed Balls

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Media captionThe shadow chancellor said raising VAT on fuel was an "own goal"

Shadow Chancellor Ed Balls has called on the government to reverse January's VAT rise on car fuel immediately.

Ministers needed to act now rather than wait until the Budget to reduce fuel charges, Mr Balls told the BBC.

He said it was wrong to increase the VAT rate at a time when tensions in the Middle East were pushing up fuel costs.

Mr Balls urged Conservative and Liberal Democrat MPs to vote with Labour to reduce the VAT on fuel when the issue is debated in Parliament next week.

High prices

During a visit to MidKent College in Gillingham, Mr Balls told the BBC South East Politics Show: "I can remember when it cost £50 to fill our car, which is a Mondeo estate.

"It cost us £74.50 last weekend and as a motorist you think 'My gosh, these prices are so high'.

"It's happening in part because there is a revolution in the Middle East, we've all seen in Libya and Egypt - that pushes up world oil prices.

"You can't blame any government for that here in Britain but George Osborne decided in January to also raise the VAT to make it worse - that's just an own goal."

At the Conservatives' spring conference in Cardiff at the weekend, and with the Budget looming, Chancellor George Osborne hinted at fuel duty cuts.

The chancellor said he knew how much fuel costs were hitting people.

Budget day

Mr Balls told the BBC: "In past times when we as Labour in government saw the world oil price go up we didn't raise the fuel duty; we cancelled it or we postponed it. That's a George Osborne decision for the Budget.

"But I'm saying to him today, and actually we'll have a debate and a vote in Parliament on Wednesday where we'll say to Conservative and Liberal Democrat MPs, 'vote with us to persuade George Osborne to reverse the VAT rise, to get petrol prices down now'.

"He doesn't even have to wait until Budget day; he can do it tomorrow, he can do it on Wednesday.

"He can act now, give some relief to motorists and hauliers, then look at the duty in the Budget, then look at these issues of world oil prices in the next few weeks.

"But don't say there's nothing you can do. The VAT rise he could reverse immediately and I think he should."

The standard rate of VAT increased from 17.5% to 20% in January as the government looked to boost tax revenues to cut the UK's budget deficit.

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