Labour to urge fuel duty rise halt

petrol pumpLabour will force a Commons vote next week to call for a planned 3p hike in fuel duty to be postponed for a second time.

Ed Balls said "it cannot be right" to hit struggling families and businesses with another tax rise, and urged MPs from all sides to back demands for the Government to cancel the increase due in January. The shadow chancellor claims the move could be funded by cracking down on tax avoidance schemes.
In a blog for PoliticsHome, Mr Balls wrote: "At a time when the cost of living is rising, our recovery is fragile and this out-of-touch Government is giving 8,000 millionaires a tax cut, it cannot be right to hit middle and low income families and small businesses with another tax increase.

"That is why Labour is calling on the Chancellor to cancel January's planned 3p rise in fuel duty - at least until next April. We will put this to a vote in Parliament on Monday and I hope MPs from all parties will stand up for their constituents and back our call.

"Where should the Government get the money to pay for this tax cut? I suggest they pay for this move by clamping down on tax avoidance. For example, there is a growing problem with some employment agencies forcing workers to become employees of an umbrella company.

"They then falsely inflate the worker's travel and food expense claims, reducing tax and national insurance, and pocket the avoided tax as profits. HM Revenue and Customs has forecast that these schemes cost the exchequer £650 million a year. Recent estimates have now put it as high as £1 billion a year. But ministers have failed to take tough action to stop it happening. Even if only a proportion of that money was recouped it could pay for the fuel duty rise to be put off until next spring."

Chancellor George Osborne scrapped a planned 3p rise in fuel duty due in August at a cost of £550 million. Campaigners from FairFuelUK claim allowing it to now go ahead in January could lead to 35,000 job losses and hit economic growth.

Labour is using one of its allotted Opposition Day debates in the Commons to force the vote, which is non-binding. Mr Balls insisted Labour had "often delayed or cancelled" planned duty rises if circumstances changed.

Downing Street said taxation was a "matter for the Chancellor" and insisted previous delays on introducing the hike had already saved drivers around £159 this year. The Prime Minister's official spokesman said: "We know that the cost of fuel is a concern for many businesses and families up and down the country. That's why we have already taken action to cancel and delay planned rises so that fuel is now 10p cheaper than it would have been.

"Taxation is a matter for the Chancellor but, as you have seen, there were a number of increases to fuel duty planned and we have already taken action to either delay or cancel those rises and as a result fuel is cheaper than it would have otherwise been. Families will have saved around £159 on fuel costs this year thanks to the decisions taken by this Government."
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