No fuel like an old fuel

One of the main things which is driving the recession in the UK (apart from toxic debt) is the cost of living coupled to the lack of an increase in income for most taxpayers. The cost of living itself is driven by rising prices in practically all areas, though there is one common denominator in all of this, fuel. The government could in theory kick start the economy by simply scrapping fuel duty and although there would be a reluctance for suppliers to drop the price totally down to market price, the difference to hauliers and even food prices would soon become apparent. People would have more money in their pockets, so would spend more, businesses would survive, some might thrive and all it would take is one small cut.

 After all they are adding somewhere in the region of 60% (at least to prices at the pumps.
As of 15th November 2010 the price of fuel, the fuel duty and the VAT level are shown in the table below:

Type of Fuel	Total Cost at Pump	Fuel Duty	VAT	% of Fuel Cost that is Tax
Unleaded	118.7p	58.19p	17.68p	64%
Diesel	122.3p	58.19p	18.21p	62%
LPG	67.5p	31.95p	10.05p	63%

H/T  http://whatgas.com/car-finance/fuel-duty.html

In 2007 fuel duty raised in the region of £25 billion, a reasonable chunk at 5% of government income...

H/T Wikipedia

But a 5% cut in the governments spending is surely an achievable target?
Of course there are those wiser in economics than I out there, there might be very good reasons why we cannot do this, though it strikes me as being quite worthwhile.
Of course it's probably illegal to do so because of the EU or some ridiculous green laws.
Still, it's a thought isn't it?