Rishi Sunak’s efforts to stem rising fuel costs are a miserable failure. The level of financial support’s entirely inadequate for those in dire need and the actions to mitigate further agony are paltry. There’s no recognition of the changed world in which we now live, perhaps understandable for someone who grew up a pampered rich boy and married into even greater wealth.
Many of his decisions show little or no understanding of everyday life, again no doubt as he’s never lived it. Staged photo-ops of fuelling up a modest car aren’t fooling anyone. This is someone who’s used to being chauffeured about and when he drives it’s for pleasure not out of necessity; and no doubt in a far from modest vehicle chosen from the fleet the family will possess.
That was shown in a Treasury answer to a question on increasing the mileage allowance. That’s the rate HMRC allows for payment on journey’s made for work. Though it’s set by them it’s used as the benchmark by employers and indeed others for reimbursement for travel costs. After all, if it’s paid at a higher level, they will be taxed on it. So what Sunak sets is what applies.
It’s currently set at 45p for the first 10,000 miles and then at 25p thereafter. It’s been that amount for quite a while, but fuel costs haven’t stayed static. Far from it, they’ve rocketed and the 5p cut applied has hardly made a dent. Indeed, in recent weeks it seemed that prices at the pumps were rising every time you drove past a petrol station. His offer as well as being inadequate is also far from generous as he’s more than made that from increased VAT revenues and is simply giving back some of the largesse he’s pocketed.
But for many, driving at work is part of the job, it simply can’t be done any other way. They’re not corporates in company cars but social workers and care workers. They need to drive at work, not just get to their place of work. The mileage rate’s essential to allow them to do their job, and that’s work which is essential to serving our communities as well as often caring for the most vulnerable. Moreover, in many rural parts doing 10,000 miles per annum isn’t hard, it’s simply doing your job
The Treasury Ministers answer was not just disingenuous but ignores the reality. They argued “depreciation is estimated to constitute the most significant proportion” of the rate. Aye that’ll be right. Folk need their car simply to work and the mileage rate’s about allowing them to do it, not save for a new or shinier model.
They also suggested that employers can choose to pay a “different mileage rate that better reflects their employee’s circumstances”. But then caveat that by saying that if it exceeds the approved rate “they will be liable to pay Income Tax and National Insurance contributions on the difference.”
This isn’t real life, Sunak lives in another world.