No10 BID TO HALT FUELTAX REVOLT
Vow to block big rises as Sunak is told axing duty freeze will hurt workers most
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’