duty on fuel if price stabiliser won’t work
business support organisation is calling on the Government to cut
fuel duty if its proposed ‘fuel price stabiliser’ proves too impractical to implement. With the recent VAT
increase and widespread predictions of permanently high oil prices,
the Forum of Private Business is arguing that a straightforward
reduction in duty would be the simplest way to tackle soaring prices
at the pumps.
The Forum made the call in response to new comments from the Prime
Minister, David Cameron, in which he signalled that the Government
was again looking into the idea of a fuel price stabiliser.
The stabiliser would be a mechanism designed to reduce the tax on
petrol and diesel as the price of oil rises, and visa versa, in
order to keep fuel prices relatively constant.
The idea was originally proposed in the Conservative pre-election
manifesto but appeared to have been dropped after the Chancellor,
George Osborne, instructed the Office for Budget Responsibility (OBR)
to look into it. According to reports, the OBR claimed that the
stabiliser would be too impractical and costly to implement.
If the same conclusion is reached again, the Forum believes the
Government should simply cut the duty it charges on fuel – reversing
recent increases at the very least. This, the Forum is
arguing, would help secure economic recovery and help the millions
of smaller businesses across the UK which are struggling with the
current record prices on the forecourts.
Forum chief executive Phil Orford said:- “The idea of the fuel
price stabiliser was sold to the public quite heavily by the
Conservatives before the election and we supported it from the
outset. Both high and fluctuating fuel prices cause serious
problems for smaller companies and their cashflows, so we would
welcome any attempts to tackle the problem.
However, since gaining power, Mr Cameron’s Government has failed to
follow through on the stabiliser concept. Instead, it has actually
increased duty on fuel by going ahead with 2 rises inherited from
the previous administration, and effectively implemented a further
price hike this month with the 2.5% increase in VAT.
Obviously, smaller firms in the haulage and transport sectors are
particularly badly hit by ever-increasing prices at the pumps but
companies of all types ultimately suffer the inflationary knock-on
effects, as costs are passed on and consumers have less disposable
income to spend.
The spiralling cost of unavoidable expenses like fuel and utilities
are one of the main problems facing smaller businesses at the
moment. Our recent ‘Economy Watch’ research found that, despite an
upturn in sales and orders, SMEs are struggling to maintain their
profitability because of these increased costs, so the issue is
threatening economic recovery. The utility companies claim their prices can’t be reduced due
to rising wholesale costs. However, the price of a litre of fuel
could be reduced at a stroke by the Government as almost 75% of the
price paid at the pumps is simply tax.
If the fuel price stabiliser is again deemed to be unworkable, a
significant reduction in duty – or perhaps a reclassification of the
VAT rate on fuel – is desperately needed to help keep businesses
moving. It is widely predicted that oil prices are only going to
keep rising over the long-term so perhaps there is little need for a
stabiliser mechanism anyway. The
debate over fuel prices is often skewed by the wider environmental
debate. But the fact remains – our economy currently relies on
transport, and therefore oil, at virtually every level, and until
alternative technology become widespread and affordable, businesses
have no choice but to use petrol and diesel in order to function.
I appreciate the Government needs to tackle the national debt but it
would be self-defeating if economic recovery is derailed due to
excessive taxation on something which is absolutely central to
Research carried out by the Forum in November found that many small
businesses experienced a rise in orders and turnover towards the end
of 2010. 30% of members on the Forum’s ‘Economy Watch’ panel
saw increases in their order books and turnovers, with only 16%
reporting a decrease. Business for the remaining 54% stayed
steady between the Forum’s previous survey in mid October and the
late November study.
However, many business owners on the panel also reported a sharp
drop in profitability during the same period as increases in fuel
costs, energy prices and raw materials hit home. At 46%,
almost half of the firms surveyed said they had seen a recent
increase in the cost of doing business, with only 1% reporting that
costs had fallen. As a result, 27% of Economy Watch panel
members reported a decrease in profitability since they were last
surveyed in October, compared to just 14% who reported an increase.
Liverpool banks on culture
helping Liverpool buck the spending downturn. New figures show
the city’s visitor numbers are on the up - and those who come here
are spending more money than they did in 2009.
Last year’s Mathew Street Music Festival (MSMF) smashed the previous
year’s visitor figures by a whopping 20,000, bringing in an
impressive £20 million to the city compared to just £15 million in
2009. And despite the tough economic times, each visitor spent
an average of £57.25 during their stay in the city, whereas in
2009 £53 was spent per person.
The announcement comes following Culture Liverpool’s review of the
success of four of the city’s major events in 2010 – MSMF; Africa
Oye - the biggest free African music festival in the UK; On The
Waterfront - a series of events which celebrates the culture of
Liverpool; and the Picasso - Peace and Freedom exhibition which was
showcased at Tate Liverpool.
320,000 attended MSMF in 2010, compared to 300,000 in 2009
► 12.6% of visitors
were from outside the city, compared to 11.7% in 2009
► Africa Oye attracted
50,000 visitors in 2010 – double the number in 2009
► The celebration of
African culture brought in £1.3 million to the city’s economy
► On the Waterfront
attracted more than 65,000 people and brought in £1.2 million to
► 95,424 people enjoyed
the Picasso exhibition, 74% of these were from outside the Liverpool
city region and 21,000 had never visited Liverpool before
Liverpool City Council’s cabinet member for culture and tourism,
Councillor Wendy Simon, said:- “These figures are fantastic
and show that, despite the fact that money is tight, culture
continues to play an important part in people’s lives and if we can
deliver events and festivals which inspire them, they will continue
to come and spend money in the city.
Many people thought there would be a post-08 slump, but we’ve shown
that the city’s economy continues to benefit by millions of pounds
because of the high-calibre events which we put on throughout the
Culture remains as important as ever and this is reflected in this
year’s impressive events programme which will not only see the city
hosting the Liverpool Boat Show, but also the return of the
much-loved Mersey River Festival.”
Liverpool is well on track to surpassing the economic impact of
2009’s cultural programme, which saw £33 million generated for the
city. So far £23 million has been brought in to the city, and there
are several large events to take place including A Winter’s Trail:
Liverpool Discovers and Chinese New Year.
MSMF and On The Waterfront were all funded by Liverpool City Council
in partnership with the European Regional Development Fund (ERDF).
Africa Oye was part funded by the city council. Picasso - Peace and
Freedom was supported by ERDF, with additional support from the
Spanish and Andalucía Tourist Offices and the Spanish Embassy
Party on Sunday, 16 January
talented singer – songwriter, Janiece Myers, who is from Liverpool,
began her solo career in October 2009. In March 2010 Janiece Myers’
independently releasing her first EP, ‘In My Element’,
which received over 6,000 downloads in its first month due in part
to a superb online fan base and highly credible showcases. Soon
after Janiece was spotted by UK Urban Music Legend, Wiley, who
snapped her up, bringing her into A-List. Janiece Myers is now a
part of one of the hottest collectives this country has seen;
working with the likes of Wiley, J2K,Baby Blue, Shola Ama, Sadie Ama
and Mz Bratt. Janiece Myers’ first single, Underground Love, which
features Wiley, will be released via A-List Music. Underground Love
has already been championed by Mistajam, Westwood, Ras Kwame and
more. Janiece Myers Launch Party 'Underground Love',
takes place at The Picket on Jordan Street, Liverpool, on Sunday, 16
January 2011, from 7pm. Tickets are just £5.00, pay at the door.
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