MP pledges to try again during Budget debate
SNP move to cut fuel tax rejected by the Treasury
Published:
A new SNP attempt to slash fuel taxes was rejected by the Treasury last night.
Exchequer Secretary Angela Eagle turned down proposals from SNP Treasury spokesman Stewart Hosie during detailed debates on the Finance Bill authorising the Budget in the Commons.
The Dundee East MP proposed a three-point plan to steady forecourt prices when the cost of oil soars by reducing the overall level of the tax, which makes up 60% of the price, to give extra reductions to reflect even higher prices in remote island and rural areas and help the hard-pressed haulage industry.
But he withdrew his proposed new clause so details can be reconsidered and a second attempt made to persuade the Treasury to accept the idea later during proceedings on the bill.
There was insufficient support from Tory and other opposition MPs to risk defeat on a vote.
Ms Eagle flatly rejected claims that sky-high pump prices lead to a huge windfall for the government, because drivers buy less fuel and those who do have to spend more on petrol or diesel have less to spend on other things, resulting in little change in overall revenue.
Her response was a disappointment to MPs who last month heard Chancellor Alistair Darling express sympathy for drivers facing soaring prices.
Mr Hosie said later he would consider detailed criticisms Ms Eagle made and redraft his proposal in an attempt to meet them.
He said: “Every time oil prices go up we pay through the nose. This proposal would see any extra cash raised from VAT on higher pump prices go straight back into an equivalent cut in fuel duty.”
His proposals have the backing of the Road Haulage Association, which said the tax changes proposed would “bring some stability to a hard-pressed industry”.
