Union urges cut in VAT on fuel
VAT on fuel must be cut to ease the burden from rising oil prices on families and businesses, the head of the country’s biggest union claimed today.
Jack O’Connor, Siptu general president, said a reduction would play a major part in maintaining economic competitiveness and send a positive message to firms thinking of investing here.
He also warned that the current rate of VAT on fuel was more than double that in Britain, one of Ireland’s main competitors.
“While a reduction in VAT might not have a dramatic impact on overall inflation it would significantly benefit working families, who are heavily dependent on private transport for commuting to work, for shopping and for accessing childcare services,” the union leader said.
“It would also help maintain the overall competitiveness of the economy and indicate to companies investing in Ireland that we are serious about addressing our energy costs.”
At present VAT on fuels vary from 13.5% for heating oil and solid fuels to 21% for petrol.
The ESB has already warned consumers to prepare for price rises of up to 20% from January 2007.
The huge increase follows rises of 3% for 2006, 4% for 2005 and almost 9% for 2004.
The average price of an ESB bill now sits at €123 every two months, and next year’s rise is expected to push it up by €12 to €24.
ESB household bills are 46% above prices in the UK.
Meanwhile, petrol-pump prices are expected to hit €1.30 in some parts of the country during the winter if crude oil prices do not ease.
Mr O’Connor urged the Government to do more to give commuters an alternative to cars.
“The Government must also act quickly to implement public-transport policies aimed at attracting more commuters to bus and rail services,” he said.
“This is particularly urgent in the Dublin area, where we should now have an extra 100 buses operating on the capital’s new bus lanes in 2006 alone, alleviating congestion and ultimately providing the basis for a viable and economic alternative to the increasingly expensive reliance on the private car.”
