Philip Hammond sparks uproar among motorists with massive hint fuel prices will go up as he ends eight-year duty freeze
Chancellor claims policy cost the Treasury £46bn since 2011 – but campaigners storm that it will be ‘straw that breaks the camel’s back for drivers’ with petrol at record highs
PHILIP HAMMOND sparked uproar yesterday by giving the biggest hint yet that the eight year fuel duty freeze is OVER.
The Chancellor said the freeze sparked by the Sun’s Keep It Down campaign in 2011 had cost the Treasury £46 billion – given what duty would have been with annual inflation-linked increases,
And he said keeping the freeze in place for the rest of the Parliament would cost a further £38 billion.
Speaking in the Commons he said: “For context this is about twice as much as we spend on all NHS nurses and doctors each year.”
Fuel duty and VAT makes up nearly 70p per litre of the cost of filling up.
Campaigners said a 2p rise in the upcoming Budget would add £50 a year to the fuel costs of a two-car family.
The AA stormed: “With all the other hikes in family expenses, such as inflation, mortgage costs, domestic energy bills, an increase in fuel duty could be the straw that breaks the camel’s back for many drivers.”
In the Commons, former Minister and Tory backbencher Rob Halfon insisted the Treasury’s own analysis in 2014 showed the benefits of a duty freeze had “offset almost all the loss of tax to the economy”.
But the Chancellor hit back that the analysis “would have to be looked at again in the context of the economy today”.
Asked whether he would commit to freezing duty in the upcoming Budget, the Chancellor would only say pump prices “represent a very real pressure for motorists”.
Petrol prices have soared to a four year high of 131.24p per litre – up 10 per cent in the past year.
Government insiders have spent the summer insisting fuel duty will not be going up despite the need to fund the £20 billion giveaway for the NHS.
But alarmed campaigners yesterday urged the Chancellor to see sense.
Howard Cox, co-founder of Fair Fuel stormed: “The Chancellor is so out of touch. He says the Government lost £46 billion in revenues because of the duty freeze. Bunkum!
“What would the economy be delivering with pump prices at £1.60 a litre.”
Speaking after the debate Mr Halfon told The Sun: “The Treasury themselves say that fuel duty freeze has grown the economy and offset any loss of taxes.
“The Chancellor should listen to the Treasury and keep the freeze for millions of hard-pressed motorists.”
The row came just a day after former Foreign Secretary Boris Johnson demanded the Tories cut tax to help “strivers”.
He urged the UK to mimic the US under Donald Trump – where tax cuts have been credited with kick-starting an incredible revival in the world’s biggest economy. He stormed: “That is the way to get the economy going.”