I'm aware that this may be seen as going against Lib Dem green credentials but I am firmly of the belief that the Lib Dems should be pushing hard for a cut in fuel duty to bring the price of fuel down by at least 10p, and preferably, 20p a litre.
Now, I don't think for a minute that we should be encouraging to produce more CO2, but at the moment the recovery is stalling due to high inflation and a switch to a greener economy will be even harder if we go back into recession. Right now people are spending more and more of their money on the essentials and therefore have less to spend on the kind of consumer goods consumption which underpin our current economic model.
When fuel prices go up, the prices of everything else goes up. Clothes, food, anything that's transported by road will go up in price. Companies which rely on the road for transportation will see their running costs go up and won't be able to afford to give their staff inflation matching pay increases. And as prices continue to go up and wages continue to stall and fall in real terms people will have less and less money to spare. They'll spend most of their money just to get buy and, without any confidence in the economy, they'll save whatever they have left over, creating a self-reinforcing of economic decline.
A 20p cut in the price of fuel would go a long way to immediately reducing inflation and putting money back in people's pockets. Already people have so little money that they're struggling to afford to be able to make it to work or to be able to pay the energy bills.
A cut in fuel duty will probably cost the treasury money in the short term. But the treasury is already losing income as people can't afford to buy petrol at all. And it's no good pricing people off the road when the public transport infrastructure isn't cheap or extensive enough to be a viable alternative. If fuel duty is cut then people will see the cost of living decrease, inflation will decrease due to the knock on effect and people will have more disposable income, breathing more life into the economy and increasing tax receipts overall.
If we Lib Dems were to make this argument then we would do two things. Firstly we would receive a great deal of credit from a financially strained electorate and secondly we would be taking a decisive measure to reduce the spike in inflation and boost economic confidence by putting more money back in people's pockets.