Tuesday, May 21, 2024
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Raising fuel duty would be political suicide, Rishi


ACCORDING to the Sun, Chancellor Rishi Sunak has privately warned that he would be forced to increase fuel duty by 5p per litre if the £20-a-week Universal Credit uplift is extended after the lockdown ends. 

We know the Chancellor has the most burdensome of tasks to claw the nation out of the deepest of fiscal black holes. No one underestimates the impending unpopularity of the monetary reparations that will be in Budgets for years to come.

The Conservative Party is built on deep electoral foundations to deliver low taxation policies, but Whitehall sources are telling me, and the media, that the Government are to break with tradition and increase taxes. The easiest of targets in the Treasury’s crosshairs look like being the UK’s 37million drivers.

But here’s the thing: it would be political suicide if fuel duty is raised. It’s utterly disingenuous to hit the world’s already highest-taxed drivers and logistics businesses, yet at the same time continuing with the £100billion white elephant HS2. Increasing a levy that already makes up more than 65 per cent of the cost of filling up will destroy jobs, raise inflation, and hit white van man and low-income families hardest. Thousands of hauliers working to minute margins will go to the wall.

That’s not all: UK motorists contribute the fifth-largest income to the Treasury. So hitting them would be akin to putting an even bigger hole in the floundering Covid ship. Paradoxically, the rumoured 5p rise in duty would raise only a fraction of the cost of the increase in Universal Credit. It is as a result of pure vindictiveness forced by an ill-informed and uncharacteristic Tory green agenda that the Treasury are now planning to lash out at motorists.

Time and again the Centre for Economics and Business Research (CEBR) has shown the negative economic effects of increasing fuel duty. Keeping it static since 2011 has been nothing but beneficial and a clear justification for abandoning Labour’s fuel price escalator. The ten-year freeze on fuel duty is slowly bringing the UK rate of tax into line with the rest of Europe. It has reduced the consumer price index (CPI) by 6.7 per cent and raised household real incomes, especially those of neediest households, by £24billion. Why abandon it when taxing fuel hits the poor hardest, with the North suffering most and London least?

The CEBR has shown that London-based drivers pay a third less of their income on motoring than those in Northern Ireland. Wales, Midlands and the North pay twice as much as capital’s drivers. Any fuel duty hike will be devastating to these regions. Driving up fuel taxes will see the great Red Wall grow again and those newly won Tory seats will haemorrhage support losing the Conservative Party thousands of drivers’ votes.

It does not take an economic genius to see how out of touch London’s decision-makers are when looking at the distribution of total household expenditure on petrol and diesel by region across the UK.

So Rishi, pleasehave the guts to quash these rumours and instead cut fuel duty and watch the economy rocket. Sit back and wallow in the subsequent growth tax revenue that will pour into the Treasury. You know very well that raising taxes to pay off the nation’s massive debt will be fatal. The way out of this fiscal mess is to turbo-charge the economy. Incentivise, don’t punish your electorate, simply revert to traditional Tory low tax fundamentals. Another ten years in Government awaits you.

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Howard Cox
Howard Cox
Howard Cox is the Founder of FairFuelUK, that has campaigned to stop £200bn of planned fuel tax rises since 2010. He is also Reform UK's London Mayoral Candidate and Secretary to the APPG for Fair Fuel for motorists and hauliers.

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