Dear god, why can't the government just stop spending money.
Stop borrowing and stop spending, please.
Don't spin and jive and then spend more. Just stop spending our money.
The cut in VAT, from 17.5% to 15%, mostly on non-essentials that we weren't going to buy anyway. But on the essential items like booze, cigarettes and petrol, duty goes up, cancelling any VAT cut. But if its duty that's going up, that doesn't scale.
Its an increase of 2p.
So say petrol is 90p, VAT would be
17.5% = 15.75p
15% + 2p = 15.5p
So its 0.25p cheaper, well done.
But if the price if petrol falls to 80p as I read in some newspaper/blog, then
17.5% = 14.525p
15% + 2p = 14p
Same price, and if it falls below 80p, then they're scraping more than they would have been without the VAT cut.
Fecket, businesses can claim back their VAT on fuel, but I'm kind of sure they can't claim back the duty bit. So this is just grabbing more from businesses who thought that low fuel prices would help a bit.