Motorists furious as Chancellor prepares to increase fuel duty

Senior political Correspondent

FUEL duty could rise for the first time in nearly a decade, the Chancellor has suggested, as he told MPS yesterday he must find money for the NHS.

Philip Hammond refused to support Treasury analysis backing a freeze on fuel duty, instead hinting he would raise tax on petrol and diesel in the Budget later this year.

Addressing Tory MPS’ concerns, he said the decision to freeze fuel duty since 2011 meant the Government had “foregone” £46 billion in revenue and expected to lose out on £38billion more if the freeze continued. He appeared to make a moral argument for increasing the tax, urging MPS to consider “the other side of this coin” – that the amount lost was double what was spent on NHS doctors and nurses each year.

Campaign groups reacted angrily last night, warning that hiking fuel duty would hit every part of the British economy, lead to higher food and transport prices, and put pressure on families already struggling to cope.

Jack Cousens, of the AA, said: “The Government talks about helping those who are ‘just about managing’, but a hike in fuel duty would be a hammer blow to household budgets across the country.

“Three quarters of the nation’s freight is transported by road, so if the Chancellor carries through this threat we will also see shops increase their prices, as they simply pass on costs to the consumer. The Government

simply sees drivers as wallets on wheels. They are increasingly hit with higher charges for fuel, insurance and parking, but in return they get a road network that is riddled with potholes, congested and rarely repaired. They are well within their rights to ask ‘What’s in it for us?’”

Mr Hammond has already pledged £20 billion to the health service and in a letter sent to the AA in August and revealed in this newspaper today, he says taxpayers “will have to contribute a bit more” to cover the cost.

Speaking in the House of Commons yesterday, he said: “To support British households the Government has frozen fuel duty for eight successive years. By April 2019 these freezes will have saved the average car driver £850, compared to the pre-2010 escalator, and the average van driver over £2,100.

“But it is important that we remember the other side of this coin. The fuel duty freezes since 2011 have meant the Exchequer has foregone around £46 billion in revenues through to 2018-19 – and a further £38billion will be foregone as a result of these freezes. This is about twice as much as we spend on all NHS nurses and doctors each year.”

Last night Conservative MP Robert Halfon, who campaigns against any rise in fuel duty, said: “The Chancellor has to listen to his own department. A fuel duty freeze helps the economy grow.

“A rise wouldn’t just be a slap in the face, it would be a punch in the goolies. It would also hit businesses at a time when they need financial stability before we leave the EU.”

Howard Cox, founder of Fairfueluk, said: “It would be political suicide for the Chancellor to hike duty on the already highest taxed drivers in the world. The freeze has generated jobs, increased GDP, lowered inflation and increased consumer spending.”