Petrol and diesel drivers face £572 charge from October under Labour rule change
All four Tory leadership contenders have warned a fuel duty hike would be catastrophic for drivers and economy. The Conservative Party leadership candidates have spoken out over the planned end to the freeze under the Labour Party government.
The Tories have slammed the proposed changes from Chancellor Rachel Reeves. Tories Robert Jenrick, Kemi Badenoch, James Cleverly and Tom Tugendhat have joined forces to issue a warning as rumours of a 10p-a-litre hike swirl.
“Labour has constantly refused to deny that October’s Budget will end the UK’s 15-year freeze on fuel duty," they said. “A predicted 10p-a-litre rise in duty will bring misery to Britain’s 37 million motorists. It will not only add £5.50 to the average fill-up, but will also increase inflation and damage our economy, jobs, business investment and freedom of movement.”
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Charging £5.50 extra every time a driver filled up means a £11 rise a week for a motorist who fills up the UK average, twice a week. Across a year it would mean drivers and petrol motorists face shelling out £572.
A Treasury spokesman said: “We do not comment on speculation around tax changes outside of fiscal events.” Prime Minister Keir Starmer warned of “tough decisions” to fix the state of the public’s finances earlier this week, cautioning that the Budget would be “painful.”
“I have credible intelligence that the Treasury has virtually settled, through its internal economic modelling, on increasing fuel duty by 10p/litre,” says Howard Cox, founder of FairFuelUK. “For nearly 15 years, I have proven that hiking levies on one of the highest-taxed motorist sectors in the world would damage the economy, jobs, inflation, business investment and freedom of movement.”
“With the uptake of electric vehicles, fuel duty receipts are declining and will continue to do so,” says Jayne Harrold, tax partner at Evelyn Partners. “Addressing the looming funding gap with a new solution will be critical for the Government to keep public finances in good shape.”
RAC head of policy Simon Williams says 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,” he says. "She also knows drivers were overcharged by a staggering £1.6bn 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 electric vehicles 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.”