Backlash over fuel and drink tax hikes to pay for NHS boost
CHANCELLOR Philip Hammond faced a backlash from Tory MPs last night over plans to raise fuel and alcohol duties in the Budget to pay for an increase in NHS spending.
The Treasury is believed to be considering tax hikes to avoid increasing government borrowing, but irate backbenchers warned that if consumers are hammered they could vote down the Budget.
The Chancellor has told departments there is no more money in the pot after the announcement of a £20billion-a-year boost for the NHS to coincide with its 70th anniversary.
The pledge was made before ministers had finished working out how to pay for it, and last night backbench Tory MPs described increasing fuel and alcohol duties as ‘absolute madness’.
Speaking in the Commons, Robert Halfon pointed to research suggesting the eightyear fuel duty freeze had contributed to the creation of 121,000 jobs, and suggested to the Treasury minister that the benefits had more than offset the loss in tax income of about £46billion.
He said: ‘Does the minister not agree that it would be absolute madness to raise fuel duty and hit working people up and down this country?’
Responding, Treasury minister Mel Stride refused to confirm specific plans which had been outlined in The Guard- ian, but said the health spending increase would mean ‘everybody in their different ways paying a little bit more’.
Government sources said linking fuel duty rates to inflation would raise an extra £800million for the Treasury next year, and billions thereafter. Lifting the freeze on alcohol duty, which was announced in last autumn’s Budget, would claw back more than £200million a year.
But last night one Tory MP savaged Mr Hammond, saying: ‘It’s yet more proof he’s more a civil servant than a politician. You keep thinking he’ll change and start listening, but he’s never going to.’ Others predicted that dozens of MPs could vote against the Budget in the autumn if tax rises went too far, making it impossible for the Bill to pass the Commons.
The PM’s official spokesman declined to comment on possible duty rises ahead of the Budget, but added: ‘I would point to our record. We have frozen fuel duty for eight successive years at a cost of £46billion, and we have a continuing commitment to policies that allow people to keep more of what they earn.’
Privately, one Whitehall insider described the idea of raising fuel duty as a ‘total non-starter’, adding: ‘Someone in the Treasury may be looking at it, but it isn’t going to happen. There are enough Tory MPs opposed to make sure you would never get it through Parliament.
‘And that’s before you even start on the DUP, who would never accept it.’
A Treasury spokesman said: ‘As the Prime Minister and Chancellor have made clear, taxpayers will have to contribute a bit more, in a fair and balanced way, to support the NHS we all use. We will listen to views about how we do this and will set out plans at future fiscal events.’
‘It would be absolute madness’