Osborne hints at fuel duty halt
A cut in fuel duty rises could be on the cards after Chancellor George Osborne promises to "find a way to help" struggling families.
Delivering a speech at the Conservative Party's spring conference in Cardiff the chancellor said: "When it costs £1.30 for a litre of petrol; £80 to fill up a family car; I know people feel squeezed. And I say this to people watching: I hear you."
He went on to hint at a potential cut: "We've got another of the Labour Party's pre-prepared rises in petrol tax also coming this April - one penny above inflation. I won't take risks with economic stability, or wreck public finances.
"But I promise you I am doing everything I can to find a way to help."
The coalition government has come under increasing pressure to ditch a further 1p rise in April.
Petrol prices are hitting record highs with some motorists having to pay £1.40 a litre, while the average price for one litre of unleaded petrol is £1.31, according to PetrolPrices.com.
Making "things worse"
A survey from professional advice website unbiased.co.uk reveals that, fuel duty is the tax Brits would most like to see abolished.
And speaking in response to news that unleaded petrol has hit the £1.30 mark, shadow Treasury minister, Kelly McCarthy said that the coalition government was making "things worse":
"George Osborne should take immediate action to help hard-pressed families facing record prices at the petrol pumps by reversing the VAT rise on petrol - using the extra £800 million from the bank levy this year."
"And in the Budget George Osborne should look again at the annual fuel duty rise due in April."
Invented by a Frenchman in 1954 and ironically introduced in the UK on 1 April 1973, VAT is an indirect tax levied on the value added in the production of goods and services, from primary production to final consumption and is paid by the buyer. Its levying is complex, with a number of exemptions and exclusions. For example, in the UK, VAT is payable on chocolate-covered biscuits, but not on chocolate-covered cakes and the non-VAT status of McVitie’s Jaffa Cakes was challenged in a UK court case to determine whether Jaffa Cake was a cake or a biscuit. The judge ruled that the Jaffa Cake is a cake, McVitie’s won the case and VAT is not paid on Jaffa Cakes in the UK.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).