MPs urge Jeremy Hunt to ease drivers' pain by not hiking fuel duty, as experts' warn of 12p per litre price rise
18 November 2022, 08:51
Conservative MPs have pleaded with Jeremy Hunt not to hike fuel duty as expected, although the tax would help plug the gap in the UK's finances.
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The move, which the Office for Budget Responsibility predicted for March after the chancellor's Autumn Statement on Thursday, would bring in a record £5.7 billion.
It would be the first rise in fuel duty in cash terms since 2011.
But MP Jonathan Gullis said the tax rise would meet with opposition from many of his backbench colleagues, after the OBR said the hike would add 12p to the price of a litre of petrol.
Mr Hunt said on Friday that he had not decided whether to increase fuel duty yet.
The OBR has estimated that the cumulative cost of freezing the tax between 2010/11 and 2021/22, relative to increasing them in line with inflation, is around £65 billion.
The OBR also noted that chancellors have repeatedly frozen the duty - even though it is supposed to rise each year in line with the RPI rate of inflation - in the face of concerted opposition.
In a letter to the Chancellor, Mr Gullis warned that if he tried to go ahead with the rise it would be opposed by a "substantial number" of Conservative MPs.
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"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 actually have their backs by keeping the price at the pump down," he said.
As well as increasing by the rate of inflation, fuel duty is due to increase by a further 5p a litre in March as a temporary cut introduced by Rishi Sunak when he was chancellor is reversed.
The OBR estimated that this mean a 23% increase in March, resulting in a 12p a litre increase in the price of petrol and diesel.
But Mr Hunt said on Friday: "Let me clear that up, that is not Government policy, we'll make a decision on that at the next budget in the spring.
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"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."
Pressed on the matter, he said: "What I'm saying is we have not made a decision and the time we make that decision is at the spring budget."
Activists are also fighting back against the expected tax increase, which Mr Hunt did not refer to in the House of Commons on Thursday. Fair Fax founder Howard Cox said the increase had been "snuck away".
"Needless to say, I'm loading both barrels to fight this tooth and nail," he added.
It comes after Mr Hunt said on Thursday that electric vehicles will no longer be exempt from vehicle excise duty from April 2025, in a move to make taxes for drivers "fairer".
Since April 2020 all zero emissions vehicles, which includes all electric cars, have been exempt from both first year and subsequent years’ road tax.
Mr Hunt said: "To make our motoring tax system fairer, I've decided that [from 2025] electric vehicles will no longer be exempt from vehicle excise duty."
"Company car tax rates will remain lower for electric vehicles and I will limit rate increases to 1% a year for three years from 2025
