Eight-year fuel duty freeze beginning to thaw as chancellor suggests tax hike

Written by Ellie

Fuel duty could be increased for the first time in almost a decade to help fund the NHS, chancellor of the exchequer Philip Hammond has suggested.

According to the Telegraph, Mr Hammond has refused to accept analysis from the Treasury supporting the fuel duty freeze.

Instead, he has hinted at hiking the tax on petrol and diesel in his next Budget announcement – expected some time in November – in a bid to help support the struggling health service.

Tory MPs claim that the government purse is £46 billion lighter due to the prolonged fuel duty freeze that has been in place since 2011.

Mr Hammond says that an extra £38 billion would be foregone over the Budget forecast period as a result of previously announced freezes – which is “about twice as much as we spend on all NHS nurses and doctors each year”.

‘Hammer blow’

The news has riled motoring authorities, which have warned that raising fuel duty would hit every part of the British economy, resulting in higher food prices and transport costs, and piling extra pressure on families already struggling to cope.

Jack Cousens, head of roads policy for the AA, believes that a fuel duty hike 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 transportation costs to the consumer,” Mr Cousens warned.

“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 is rarely repaired.”

Mr Hammond defended the idea in the Commons, saying that by April 2019, the freezes will have been in place for eight years running, saving the average car driver £850 and the average van driver over £2,100, compared to the pre-2010 escalator.

Ellie Baker, brand manager at Fuel Card Services, comments: “Upping fuel duty would have a devastating effect on so many aspects of everyday life; not just the prices we pay at the pump but the prices on supermarket shelves too.”

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Credit: PhotoTalk/iStock

Posted on 13th September 2018

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