Drivers Are "Fed Up" The Government Can't Make Up Its Mind On Fuel Duty
Jeremy Hunt insisted the Government has "made no decision" on fuel duty (Alamy)
Jeremy Hunt has insisted that no decision has been made about whether the government will raise fuel duty after a hike was teased in official treasury documents, but drivers are keen for certainty following more than a decade of frozen prices.
The Office for Budget Responsibility (OBR) estimated that the tax on fuel is due to increase by 23 per cent in March, adding an extra 12 pence per litre onto the price of petrol and diesel, and increasing the rate for the first time in more than a decade.
But Chancellor Jeremy Hunt, who issued a swathe of tax rises yesterday as he grapples with the country's tattered finances, has said that the OBR made an “assumption” and that such a rise is “not government policy”.
A former cabinet minister was also dismissive of the OBR's fuel duty forecast. "Not gonna happen," they told PoliticsHome.
Fuel duty is currently 52.95 pence per litre, after it was cut from a rate of around 58p per litre where it had been frozen since 2011.
That cut, announced by then-chancellor Rishi Sunak in a Spring Statement earlier this year, is due to expire at the end of March 2023. In their Economic and Fiscal Outlook published alongside the autumn statement yesterday, the OBR said that the “planned” fuel duty rise of 23 per cent next spring would raise nearly £6 billion.
“This would be a record cash increase and the first time any Government has raised fuel duty rates in cash terms since January 1 2011,” they said.
The fuel duty freeze has been upheld by numerous Chancellors in recent years.
George Osborne, chancellor in David Cameron's government from 2010-2016, first delayed planned rises in fuel duty in 2012, averting a backbench rebellion amid calls from Labour for proposed increases to be postponed.
His successor Philip Hammond kept the price further locked during his time in Theresa May’s government from 2016-2019, despite telling the Commons in 2018 that the Treasury had lost out on billions as a result.
During his time as chancellor in Boris Johnson’s government from 2020-2022, Sunak implemented the further 12-month-long cut, when consumers were facing rising fuel rates this spring after Russia’s invasion of Ukraine cause prices to soar.
Now, as the cost of living looks set to continue into 2023 and perhaps beyond, Hunt is keen to point out that ministers are yet to make a decision on the rise forecast by the OBR.
“Let me clear that up, that is not Government policy," Hunt told radio station LBC on Friday.
“We’ll make a decision on that at the next Budget in the spring. That was just an assumption that the OBR made.
“They’re an independent organisation, they make assumptions, and we have made no decision on that at all.”
Howard Cox, the founder of the FairFuelUK campaign group is vehemently opposed to an increase in fuel duty at a time when household finances are already squeezed, and people may find it difficult to use cars less.
Cox told PoliticsHome that drivers are “really fed up of being treated as cash cows” when they have “no choice but to use their vehicle to go to work”.
FairFuelUK is calling for a 20p cut in the duty and a regulatory body for pump pricing. Cox believed “the fuel supply chain in fact for the last year has ripped off motorists mercilessly and the government have enjoyed that because they get extra billions of VAT because of the high price of fuel”.
As with chancellors who have gone before him, Hunt is likely to face opposition from his own backbenches should any hikes go ahead.
Jonathan Gullis, the Conservative MP for Stoke on Trent North, accused the OBR, an independent forecaster with no power to set fuel duty, of “punishing motorists in their pockets”.
“The Chancellor needs to listen to motorists, van drivers and truckers, who are already being smacked hard with cripplingly high taxation, and prove to them we, my government actually have their backs by keeping the price at the pump down!," he said in a statement released through FairFuelUK.
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