Drivers warned to organize for gas responsibility hike in ‘painful’ Budget
Drivers are being warned to prepare for a fuel duty hike as Chancellor Rachel Reeves lines up tax rises in a ‘painful’ Budget.
The RAC issued an alert to motorists as Labour looks to fill a £22billion ‘black hole’ in the public finances at the upcoming fiscal event on 30 October.
A 5p per litre cut in fuel duty was introduced by the Conservative government in March 2022 while, before this, the levy had been frozen at 57.95p since March 2011.
The RAC claimed Ms Reeves has ‘no option but to put fuel duty back up to 58p a litre in October’s Budget’.
Meanwhile, Howard Cox – the founder of campaign group FairFuel UK – claimed the Treasury has ‘virtually settled’ on increasing fuel duty by 10p per litre.
Amid Labour’s bleak warnings about the state of the public finances, Ms Reeves has already hammered millions of pensioners by removing their winter fuel payments.
She today refused to rule out a slew of tax rises at her first Budget, amid persistent reports she could hike inheritance tax and capital gains tax.
It came after Sir Keir Starmer used his first major speech since becoming Prime Minister to warn of a ‘painful’ Budget in a doom-laden address.
But the Tories dismissed Labour’s claims they left a dire inheritance for Sir Keir’s new Government.
They instead pointed to the PM and Chancellor’s decision to splurge billions of pounds on ‘inflation busting pay rises’ for public sector workers.
Drivers are being warned to prepare for a fuel duty hike as Chancellor Rachel Reeves lines up tax rises in a ‘painful’ Budget
A 5p per litre cut in fuel duty was introduced by the Conservative government in March 2022 while, before this, the levy had been frozen at 57.95p since March 2011
The RAC issued an alert to motorists as Labour looks to fill a £22billion ‘black hole’ in the public finances at the upcoming fiscal event on 30 October
In his warning to motorists, Simon Williams, the RAC’s head of policy, said: ‘We’ve reached the conclusion the Chancellor has no option but to put fuel duty back up to 58p a litre in October’s Budget.
‘She knows the 5p discount is losing the Treasury £2bn a year.
She also knows drivers were overcharged by a staggering £1.6billion last year according to the Competition and Markets Authority’s recent report.
‘We’d normally be against any increase in duty, but we’ve long been saying drivers haven’t been benefitting from the current discount due to much higher-than-average retailer margins.
‘As more and more EVs come on to the roads the Government will need to tax drivers differently.
‘We think replacing fuel duty with a pay-per-mile system as soon as possible is the way forward as then the only tax levied on fuel would be VAT. This would give retailers nowhere to hide.’
The RAC is calling on retailers to slash fuel prices to reflect lower wholesale costs.
It believes average prices should be lowered from 142p per litre to 136p per litre for petrol, and from 147p per litre to 139p per litre for diesel.
It said retailers’ margins – the difference between what they pay for fuel and the pump price – were 10p per litre for both fuels last week, compared with the long-term average of 8p per litre.
Mr Cox, a Reform UK politician as well as the founder of FairFuelUK, said: ‘I have credible intelligence that the Treasury has virtually settled… on increasing fuel duty by 10p a litre.
‘I predict the net outcome from the October Budget is that the UK’s 37million drivers are set to be fleeced on a scale not seen since 1997 to 2010 when Labour increased fuel duty by a staggering 46 per cent.’
Jeremy Hunt, the Conservative shadow chancellor, said Ms Reeves’ ‘attempt to blame her economic inheritance for her decision to raise taxes… will not wash with the public’
On a visit to Paisley, Renfrewshire, this morning, Ms Reeves repeatedly refused to rule out a hike in inheritance tax and capital gains tax at her first Budget.
‘I’m not going to write a Budget two months ahead of delivering it,’ the Chancellor told broadcasters.
‘We’re going to have to make difficult decisions in a range of areas. On spending, on welfare and tax we’re going to have to make a series of difficult decisions.
‘But I’ll set out that detail in the right and proper way on 30 October at that Budget.’
She added: ‘The UK economy is just emerging from the recession that we entered into last year, and two quarters of positive economic growth is not going to reverse more than a decade of economic stagnation.
‘Much work is needed to rebuild the foundations of our economy so we can rebuild Britain and make working people better off, and that is why growing our economy is absolutely essential.
‘Unless we grow the economy, we’re going to continue to be in a situation where taxes are at too high a level and public spending is not sustainable.
‘We’ve got to break out of this doom loop, which is why growing the economy is the number one priority of this new Government.’
But Jeremy Hunt, the Conservative shadow chancellor, said Ms Reeves’ ‘attempt to blame her economic inheritance for her decision to raise taxes – tax rises she had always planned – will not wash with the public’.
He added: ‘Reeves and Starmer have spent weeks talking down the economy, whilst simultaneously handing over billions in inflation busting pay rises for their union paymasters.
‘It simply does not add up. Labour promised over 50 times in the election they would not raise people’s taxes and now they are laying the ground to do just that.
‘We will hold them to account on their promises.’
