Vow to block big rises as Su­nak is told ax­ing duty freeze will hurt work­ers most

Daily Mail - - Coronaviru­s Crisis - By John Stevens Deputy Po­lit­i­cal Edi­tor

ANY Trea­sury at­tempt to bring in a big fuel duty rise will be blocked by Boris John­son, a No 10 source said last night.

Rishi Su­nak is con­sid­er­ing end­ing a ten- year freeze on the levy in his au­tumn bud­get. It has been claimed as much as 5p could be added to a duty that has stood at 57.95p a litre for petrol and diesel since 2011.

How­ever the source said: ‘ Rais­ing fuel duty by 5p would be an act of self harm. What­ever the Trea­sury ma­chine might think, we are not do­ing it.’

Trea­sury in­sid­ers yes­ter­day sug­gested a one or two pence rise was more likely. This would still prove con­tro­ver­sial with back­benchers who have warned whips they would vote against a big hike.

Robert Hal­fon, a Con­ser­va­tive MP and for­mer min­is­ter, last night said end­ing the freeze would be ‘en­tirely the wrong thing to do’.

He added: ‘ The Prime Min­is­ter wants peo­ple to go back to of­fices. If the duty rises, we ba­si­cally will be say­ing to them “Go back but we are go­ing to clob­ber you”.

‘We are sup­posed to be the party of lev­el­ling up not the op­pres­sive fist of tax­a­tion on work­ing peo­ple.

‘Peo­ple didn’t just vote for us be­cause of Brexit, but be­cause they thought Boris was go­ing to be cut­ting the cost of liv­ing. The Prime Min­is­ter said him­self he had no plans to raise fuel duty.’

Mr Hal­fon said a fuel duty rise would also hit pub­lic ser­vices: ‘It would mean ask­ing the NHS to pay more for run­ning am­bu­lances, adding to the cost of driv­ing for the po­lice.’

Howard Cox, founder of the Fair Fuel cam­paign, warned that in­creas­ing duty would ‘ hit low­in­come drivers hard­est’.

He said: ‘In­stead, put much more money into peo­ple’s pock­ets. The ex­tra con­sumer spend­ing to drive up GDP, and all that goes with it, will help the econ­omy re­cover quickly, the en­vi­ron­ment long term, and re­store con­fi­dence in our be­lea­guered Government.

‘But hit­ting drivers more in their pock­ets will drive Tory vot­ers away from the once pop­u­lar Boris.’

At a Com­mons Trea­sury com­mit­tee ses­sion yes­ter­day, Paul John­the son of the In­sti­tute for Fis­cal Stud­ies sug­gested fuel duty would need to be re­placed with a levy on the num­ber of miles driven as elec­tric ve­hi­cles be­come more pop­u­lar.

He said this was ‘partly to re­place

rev­enue but partly to re­flect the ex­ter­nal­i­ties cre­ated by driv­ing, which are ac­tu­ally largely about con­ges­tion rather than about emis­sions’.

Mr John­son said min­is­ters should not wait un­til elec­tric ve­hi­cles be­came the norm: ‘At that point it would be too late be­cause you would have lost the petrol charg­ing and you would be in­tro­duc­ing a new tax, which would look like a big tax rise.’

Mr John­son also said the Chan­cel­lor would have to raise £44bil­lion through tax hikes if he did not cut spend­ing in his au­tumn bud­get.

He told MPs: ‘You would have to look at the sub­stan­tial taxes. We know that get­ting on for two thirds of tax rev­enues come from na­tional in­sur­ance, in­come tax and VAT. So I would expect in the medium run in­creases in those taxes.’

Mike Brewer, chief econ­o­mist at the Res­o­lu­tion Foun­da­tion, sug­gested the tax black hole could be as great as £60bil­lion a year.

He added: ‘We either need sub­stan­tial tax rises, or we’ve got to pro­vide less good health, so­cial care and pen­sions – or the pop­u­la­tion has to pay more for th­ese ser­vices them­selves.

‘ Be­cause the econ­omy is so un­cer­tain and looks weak, the ac­tual ef­forts to close the £60bil­lion gap should not hap­pen yet.’

‘Hit­ting drivers in their pock­ets’

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