Chancellor of the Exchequer Jeremy Hunt, who made his Autumn Statement to the House of Commons yesterday, has denied he plans a 23 per cent hike in fuel duty – the first rise for more than a decade, and at odds with the policy adopted by his Tory predecessors in the post for more than a decade – which the Office for Budget Responsibility (OBR) suggested yesterday would come into force next March.
In an analysis published yesterday, the OBR, the non-departmental public body that oversees government finances, suggested that fuel duty would rise by 23 per cent with effect from March next year.
Among those reacting to the watchdog’s forecast of a rise in fuel duty was Howard Cox, founder of the lobby group Fair Fuel UK, which is funded in part by the road haulage industry, who described it as a “bombshell” and said he would fight it “tooth and nail.”
— Howard Cox (@HowardCCox) November 17, 2022
Rumours of the purported rise also sparked fury from backbench MPs, with former Education Minister Jonathan Gullis, writing on behalf of other MPs including former Home Secretary Priti Patel, urging Hunt to provide clarification on the issue.
“My fellow MPs and I, want to see fuel duty cut to stimulate growth, but at least frozen at the current level for the lifetime of this Parliament,” he wrote, with his letter retweeted by Cox, who was also mentioned in it.
See MP Jonathan Gullis letter to @Jeremy_Hunt asking clarification to @OBR_UK's claim #FuelDuty is to rise 23% in March23 not mentioned in #autumnstatement2022 - Is this just the 5p 2022 cut going back on? @LiamHalligan @darrengrimes_ @Nigel_Farage @talktv @GBNews @jkyleofficial pic.twitter.com/lOj0xCEEnZ
— Howard Cox (@HowardCCox) November 17, 2022
But speaking on BBC Breakfast this morning, the Chancellor said: “Let me clear that up, that is not government policy. We will make a decision on that at the next budget in the Spring.
“That was just an assumption that the OBR made – they’re an independent organisation, they make assumptions. We have made no decision on that at all.”
With effect from 23 March this year, fuel duty for leaded petrol was cut by then Chancellor of the Exchequer, and now Prime Minister, Riishi Sunak by 5p to 62.67 pence per litre, and for unleaded petrol, diesel and biodiesel for road use by the same amount to 57.95 pence per litre – their lowest levels since 2009.
If it were to come into effect, a 23 per cent increase from next March would therefore see fuel duty on leaded petrol rise to 77.08 pence per litre, and for the other categories to 65.13 pence per litre – in both cases, the highest levels ever.
The Fuel Price Escalator was introduced by John Major’s Conservative government in March 1993 in an attempt to reduce pollution from vehicle emissions and reduce the need for building new roads to cope with the forecast increase in motor traffic in the years ahead.in
Initially, it was set at 3 per cent above inflation annually, and was increased later in 1993 to 5 per cent above inflation. After Labour came to power under Tony Blair in 1997, it was increased to 6 per cent above inflation, remaining there until 2000 when, following a national fuel shortage amid the rising price of oil, then Chancellor of the Exchequer Gordon Brown said that from then on it would only rise in line with inflation.
It was replaced by the Fuel Duty Stabiliser after the Conservative and Liberal Democrat coalition came to power in 2010, and while Brown’s successor at Number 11, George Osborne, initially announced plans to increase it above inflation, those were subsequently abandoned.
Both he and subsequent Tory Chancellors have frozen it ever since, until Sunak actually cut it earlier this year – with their announcements that it is staying the same or going down always greeted by huge cheers from the government benches, waving their order papers at opposition MPs pledged to increase it.
As the self-styled party of low taxation, any plans for a rise in fuel duty would almost certainly spark a revolt from backbench Tory MPs, many of whom, as expressed by Gullis in his letter, see it as a long-standing flagship policy, and one that differentiates the Tories from Labour.
The first year of the Coalition also saw Local Government Secretary Eric Pickles and Transport Secretary Philip Hammond their intention to end to the so-called “war on the motorist” announcing that the government would no longer set national guidance to local authorities on car parking charges, and withholding funding for new speed cameras.
Similar rhetoric was employed by Sunak this summer in his unsuccessful Conservative Party leadership campaign against Liz Truss (which could make some people wonder who exactly has been waging this supposed war over the past 12 years).
With his backers describing him as “the most pro-driver Chancellor in history,” Sunak said: “As Chancellor, I introduced the largest cut to fuel duty in a generation, and as Prime Minister I will go further so that we stop the war on motorists once and for all.”
If, as Harold Wilson reputedly once said, “A week is a long time in politics,” then the three months that have elapsed since Sunak uttered those words constitute an eternity, and it’s notable that there was no mention of any planned increase in fuel duty within Hunt’s statement to the House of Commons yesterday – though given the recent turmoil in UK politics, whether that will still be the case when he, or whoever is Chancellor by then, announces the Spring Budget is anyone’s guess.
Meanwhile, the BBC’s coverage of Hunt’s statement, in which he confirmed that Vehicle Excise Duty (VED) would be extended to electric vehicles, has been criticised due to its reference to “road tax” – something that hasn’t existed since 1937 – with one road.cc reader submitting a complaint to the broadcaster, accusing it of “pushing (yet again) an anti-cycling agenda.
In his complaint to the BBC, road.cc reader hawkinspeter said wrote: “The article has a headline ‘Electric car drivers to pay road tax from April 2025’ and this is completely inaccurate. The article refers to VED and not ‘Road Tax’ as that hasn’t existed since 1937.
“What is particularly annoying about this is that a certain segment of the population refers to ‘Road Tax’ when complaining specifically about cyclists and so by putting ‘Road Tax’ into the headline, the BBC is pushing (yet again) an anti-cycling agenda and prompting yet more abuse against cyclists out on the road.
“There is literally no sensible reason to use the incorrect and out-of-date ‘Road Tax’ except to try to hurt people who cycle.”
As we pointed out on the live blog yesterday, it wasn’t just the BBC that used the misleading misnomer – HM Treasury itself did so as it tweeted the news about VED being extended to electric vehicles.
The shift to Electric Vehicles is continuing at pace as the UK moves to net zero.
Therefore from 2025, road tax will be introduced for EVs so all motorists begin to pay a fair share.
— HM Treasury (@hmtreasury) November 17, 2022
Richard Dilks, chief executive of the national shared transport charity Collaborative Mobility UK (CoMoUK), urged the government to rethink its plans, saying: “Reducing emissions from transport is vital if the UK government is to meet its commitment to cut overall emissions by 78 per cent by 2035 and reach its net zero target by 2050.
“Transport remains the UK’s largest source of emissions, so it is important that any changes to vehicle taxation also deliver transport decarbonisation.
“This means supporting shared transport, including shared electric vehicles like those in car clubs, as well as public transport, active travel and delivering on targets such as boosting vehicle occupancy.
“We know that car clubs help to reduce the overall number of vehicles on the road network, giving space back to communities and helping to improve air quality in towns and cities.
“We think government should exempt car club vehicles, which form a tiny fraction of the UK’s car fleet but serve over 800,000 members, from Vehicle Excise Duty,” he added.
Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.