The Treasury Chief Secretary, Rishi Sunak, has rejected calls for a reduction in fuel VAT, citing budget constraints as the reason for his decision. The move has been met with disappointment from motorists and campaigners who argue that a reduction in fuel VAT would provide much-needed relief to struggling households.
Fuel VAT currently stands at 20%, which means that for every Â£1 spent on fuel, 20p goes to the government in tax. This tax is in addition to fuel duty, which is currently 57.95p per litre for petrol and diesel. The combined effect of these taxes means that the UK has some of the highest fuel prices in Europe.
Campaigners have been calling for a reduction in fuel VAT for some time, arguing that it would help to ease the financial burden on households, particularly those on low incomes. They point out that fuel is an essential item for many people, particularly those who live in rural areas where public transport is limited.
However, the Treasury Chief Secretary has rejected these calls, stating that the government cannot afford to reduce fuel VAT at this time. He argues that the government is facing significant budget constraints due to the ongoing COVID-19 pandemic, and that any reduction in tax revenue would have to be offset by cuts to public services or increases in other taxes.
This decision has been met with disappointment from motorists and campaigners, who argue that the government should be doing more to support struggling households. They point out that fuel prices have risen significantly in recent years, and that many people are struggling to make ends meet as a result.
Despite this setback, campaigners are continuing to push for a reduction in fuel VAT, arguing that it is a necessary measure to support struggling households. They are calling on the government to reconsider its decision and to take action to ease the financial burden on households across the country.