THE Treasury’s customary pre-Budget routine, leaking threats of a fuel duty hike, is upon us again. Hurrah!
There’s a big difference this time, though – we are in a pandemic and more than 100,000 have regrettably died. The Government has borrowed and spent billions on the never-never to prop up business, jobs and society.
In the main, ministers have done a good job. Inevitably, they are now seeking ways to pay it off. And guess what? The easiest of cash cows is again first on Rishi Sunak’s radar as the target for a quick grab. You guessed it – the UK’s 37million drivers!
This is despite FairFuelUK presenting, every year since 2011, coherent independent economic evidence to Exchequer Secretary after Exchequer Secretary that increasing fuel duty is detrimental to the economy, business, low-income families, and the logistics industry.
It seems our centrefold Chancellor is hellbent on hitting motorists unashamedly in their pockets. And this time, his wish to reverse the decade-long fuel duty freeze may come true, hidden behind a virtue-signalling, disingenuous, ill-informed green agenda.
And therein lies our disbelief. All rational common sense is to be thrown out of the Conservative Party’s traditional low-tax ethos and replaced with a quick and easy cash grab mindset.
A cash grab that will cost the Tories those hard-won northern ‘Red Wall’ seats and potentially – even this long way out – stop them winning future elections so comfortably, or perhaps stop them winning at all.
We just don’t get it! The ten-year freeze on fuel duty is gradually bringing the UK rate of tax into line with the rest of Europe. It has reduced the Consumer Prices Index by 6.7 per cent and raised household real incomes, especially those of the poorest households, by a total of £24billion per year.
Why abandon it when taxing fuel hits the impoverished hardest, with those above the Watford Gap suffering most and those in closeted London least?
The average haulier spends 40 per cent-plus of his or her hard-earned sales income fuelling the high-tech, low-emissions chariots in which goods are transported. And at current rates, 65 per cent of these fill-up costs contribute to the Treasury’s fifth-largest annual income, without fail.
Our High Streets are in demise and the exponential move to online deliveries to our front doors is critically even more dependent on low distribution costs.
Truckers work on tissue-thin margins. As the chief executive of the Road Haulage Association, Richard Burnett, eloquently conveys, time and time again: ‘For an industry that has to make every single penny count, the effect of a duty increase of just 1p per litre will be devastating and will mean the end of the road for many operators.’
He adds: ‘Last April, as Covid-19 tightened its grip on the UK, we asked industry as a whole how it was coping. The results were startling – 50 per cent of the UK’s trucks were laid up as a result of contracts ending due to the virus and drivers being laid off, or furloughed.
‘Those able to carry on picked up a lot of the slack and although it was never a case of business as usual, they did their absolute best to ensure that the UK didn’t go without.’
And how is this all-powerful Government to reward the commercial heartbeat of the economy for its front line efforts? Yep, you got it, with a punitive fiscal kick in the logistics.
Our campaigning friends and respected MPs, Robert Halfon and Craig Mackinlay, have no doubts that increasing fuel duty is manifestly wrong. They are one-nation Tories who are on the side of common sense and the majority of the electorate.
Robert says: ‘Levelling up must mean cutting the cost of living for working people. At a time when those on lower incomes are struggling financially, a fuel duty increase would level down – far from building back better, it would damage the foundations of economic recovery.’
Craig says: ‘Fuel duty rises are not supported by the public because they are bad for the economy, bad for business and bad for jobs.
‘Motorists in the poorest ten per cent of the UK population already spend proportionately twice as much of their disposable income on fuel as wealthier groups, so increasing fuel duty will have a disproportionate tax impact. The Chancellor must reject the green lobby’s calls and continue the successful and popular freeze on fuel duty.’
Rishi will definitely be risking political suicide if he breaks the promise Boris Johnson made to the nation – and especially to the then Red Wall constituencies – prior to his landslide election victory in December 2019, when he clearly said fuel duty would not be hiked. https://www.youtube.com/watch?v=sss5_2Erve0
A FairFuelUK survey in March 2020 found only a quarter of motorists who backed the Tories in that election would do so again if Rishi Sunak ended the fuel duty freeze. That was 12 months ago. Opinion has not changed.
So there you have it. A rise in fuel duty would hit the poorest most. Such a rise is truly regressive. The way forward out of the huge economic quagmire is to incentivise, not punish, the very people at the heart of any commercial post-pandemic recovery.
The Centre for Economics and Business Research has predicted that a rise in fuel duty would generate extraordinarily little revenue, but most certainly would risk jobs, push up inflation, and stagnate business investment.
There are already 50,000 vacancies for HGV drivers. These job opportunities will dry up totally if extra costs are burdened upon haulage bosses for a deluded quick fix to the economy.
The Government’s pro-cycle lane epiphany and recent unexpected mountain of anti-driver decrees are pushing ministers blindly to see the world’s already highest-taxed drivers as mere easy pickings.
At the same time, they are ignoring electric vehicles that enjoy completely free use of our roads. It is pathologically wrong to punish diesel and petrol drivers by increasing an already regressive tax through an ill-informed, virtue-signalling ideology.
In the myopic minds of transport and Treasury politicos, it is evident that ‘the polluter pays’ will evolve into ‘the user pays’. That will of course, incense those well-off electric vehicle drivers who bought their characterless, zilch-emissions contraptions because they qualify for zero taxes and urban charges exemptions.
There is a prophetic irony here. Do you recall when we were all told to switch to diesel from petrol more than 20 years ago? Deja vu is rearing its familiar head.
We will be fighting for the UK’s 37million drivers every step of the way to get fuel duty reduced or, at worst, to remain frozen, so more money is put back into consumers’ pockets, small businesses, and the vital haulage industry.