Reported fuel duty rise of 23% is not government policy insists Chancellor

Suggestions that fuel duty will be hiked by 23% from March 2023, in an official report on yesterday’s Budget, are not government policy, the Chancellor has insisted.

Immediately after the Budget, the Office for Budget Responsibility (OBR) released its report and tucked away on page 53 it said: “The planned 23% increase in the fuel duty rate in late-March 2023, which adds £5.7bn to receipts next year. This would be a record cash increase, and the first time any government has raised fuel duty rates in cash terms since 1 January 2011. It is expected to raise the price of petrol and diesel by around 12 pence per litre.”

However, when questioned about the OBR document Chancellor Jeremy Hunt told BBC News this morning that the government has made no decision on whether to increase the rate of fuel duty. He said: “That is not government policy. We will make a decision on that at the next budget in the spring.

“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. We have not made a decision and the time we make that decision is at the spring budget.”

The RAC was the first organisation to highlight the information hidden away in the OBR document. Its head of roads policy, Nicholas Lyes, said: “The government has always made a big deal of cancelling duty rises in the past and will face colossal pressure to do the same next year. After all, a rise of these proportions would heap yet more misery on the millions of households that depend on their vehicles, most of whom will just endured one of the costliest winters on record.

“Instead, we urge the government to focus on giving serious thought to developing a fair taxation system that can eventually replace fuel duty, which is effectively on borrowed time given the numbers of zero-emission vehicles on the roads that pay no fuel duty whatsoever. Our research suggests drivers broadly support the principle of ‘the more you drive, the more tax you should pay’, with more than a third (36%) saying a ‘pay per mile’ system would be fairer than the current regime – although three-quarters (75%) are concerned the government might use such a system as a way of increasing the amount they are taxed.”

MPs who support FairFuel UK have written to the chancellor asking for clarification on the OBR’s Budget report.

Jonathan Gullis MP said: “This sneaky attempt by the OBR to give the eco woke warriors what they want, punishing motorists in their pockets, is morally wrong. 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, my government, actually have their backs by keeping the price at the pump down.”

Craig Mackinlay MP commented: “The curious statement on page 53 of the OBR report indicating a planned 23% increase in fuel duty, taking a further £5.7bn from taxpayers I can only assume and hope is on an outdated assumption that the 5p duty cut introduced by (then) Chancellor Sunak will be reversed and the long abandoned fuel price escalator of inflation plus 6% will be restarted. This cannot happen and will be opposed by a huge number of MPs. It would be beyond ridiculous to give a generous lift to benefits and pensions simply to take it away in an inflation busting fuel duty rise. My long-held concern about the OBR and their true objectivity is showing through as a quango that is out of control and looking increasingly like the puppet-masters of elected government.”

Howard Cox, founder of FairFuelUK, added: “It would be economics of the asylum if this short-term thinking ill-informed government whacked even more filling up costs, onto one of the world’s already highest taxed drivers. Yet another Chancellor, it seems, who doesn’t understand that the cost of filling up is the biggest influence on inflation and the cost of living. High fuel costs and taxes damage GDP, close businesses, restrict travel and reduce spending. What happens to MPs when they get into the cabinet warrants them getting immediate psychotherapy, to understand what the rest of us recognises as common sense and living in the real world of just about managing.”

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