Reverse petrol VAT rise, says Balls

Shadow chancellor Ed Balls has called for the VAT increase on petrol to be reversed
12 April 2012

George Osborne has been urged to reverse the VAT rise on petrol as a way of providing some "immediate relief" for cash-strapped motorists and hauliers.

The Chancellor had committed an "own goal" in allowing the recent hike to 20%, which was part of an "extreme and reckless strategy" on the economy, Labour claimed.

As petrol prices climb above £1.31 a litre, shadow chancellor Ed Balls said Labour would force a Commons vote aimed at reversing the rise.

But he declined to commit to a wider VAT cut, stressing the "unfairness" of the hike. It would not be "responsible" to make commitments "on every tax rate and every benefit rate", he told the Murnaghan programme on Sky News.

Labour leader Ed Miliband and Mr Balls will on Monday give further details about their call for the cut and set out measures to use the bank bonus tax to boost jobs and construction.

Mr Balls said: "I think the VAT rise in January was very badly timed - it has pushed inflation up, it has made it harder for the Bank of England, but of course it has contributed to what was already a big rise in world oil prices."

He added: "He can act now. In the Budget he has got a choice to make about fuel duty. When we were in government we often didn't go ahead with fuel rises if the world oil price was high.

"I think he should act immediately on VAT. This was an own goal and he didn't have to do it."

"In Parliament on Wednesday we will be urging Conservative and Liberal Democrat MPs to join with us in voting in Parliament to urge the Chancellor to cut VAT on fuel now and give immediate relief to hauliers and motorists across the country."

Mr Balls also hit out at claims in the Sunday Telegraph that the Chancellor could use the Budget to change rights on maternity and paternity leave for people working in firms employing fewer than 10 staff.

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