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Tue, 14 July 2020

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Rishi Sunak 'to keep fuel duty freeze' in Budget victory for Tory MPs

Rishi Sunak 'to keep fuel duty freeze' in Budget victory for Tory MPs
2 min read

Rishi Sunak is set to keep the decade-long freeze on fuel duty in today's Budget in a victory for Conservative MPs.

The Sun reports that the Chancellor will scrap a planned 2p-a-litre tax rise after fierce resistance from Tory backbenchers and motoring campaigners.

The freeze was first imposed by then-Chancellor George Osborne in 2011, with the levy on petrol and diesel held at 57.95p a litre since then.

But the Conservative manifesto made no promise to maintain the pause, and it had been reported that Mr Sunak could move to end it as part of an environmentally-friendly tax drive.

A group of 36 Conservative MPs wrote to the Chancellor earlier this week, urging him not to "balance environmentalism on the backs of working people".

The backbenchers, who included former ministers Iain Duncan Smith, Chris Grayling and David Davis added: "Every penny of a fuel price rise hits their financial security.

"Increasing fuel duty also impacts bus users, food prices, public services and businesses. Prices for much else, too, go up because of the high cost of transport.

"We are optimistic that this will be a government for workers."

The Sun reports that Mr Sunak will now pause the planned hike until at least April 2021, costing the Treasury an estimated £800m. 

According to the Office for Budget Responsibility, fuel duty alone brought in 3.5% of all Treasury receipts in 2019/20 - netting some £28.4bn for the exchequer.

The Chancellor will also use Wednesday's Budget to earmark hundreds of billions of pounds for infrastructure spending, in a move Treasury sources say will put public investment at its highest level in real terms since 1955 by the end of the Parliament.

Mr Sunak said:  "This is a Budget for people right across the country – no region will be left behind.

"We have listened and will now deliver on our promise to level up the UK, ensuring everyone has the same chances and opportunities in life, wherever they live."

But Labour's John McDonnell hit back: "Mr Sunak is asking us to congratulate him for partially rebuilding what the Conservatives have destroyed over the last 10 years."


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