Car tax changes: Tory MPs write to Chancellor in bid to stop ‘detrimental’ fuel tax rise

Car tax changes: Tory MPs write to Chancellor in bid to stop ‘detrimental’ fuel tax rise

A total of 26 Conservative MPs have called upon the Chancellor to maintain the 10 year freeze on fuel duty ahead of his March budget. It is understood the Chancellor is considering ending the freeze with a rise of up to 2p per litre expected.

However, it is expected the scheme would cost the Treasury billions of pounds in extra revenue at a peak time of possible earnings.

Alongside coronavirus debt, the Treasury is also facing a £40billion black hole caused by the switch to electric cars.

As more road users make the transition to new models, fewer road users are paying traditional Vehicle Excise Duty (VED) and fuel duty charges.

Fuel duty was frozen by Rishi Sunak in last March’s budget after he claimed people relied on their cars.

Prime Minister Boris Johnson also claimed he had no intention of raising the charge during the 2019 General Election campaign.

A report from the CEBr and FairFuelUK suggested a 2p rise could cut GDP by up to £600million.

The report claimed a small rise could also reduce employment by up to 8,000 jobs and add 0.6 percent to inflation rates.

Conservative MP for Thanet South, Craig Mackinlay said: “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 10 percent 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.”

Howard Cox, founder of FairFuelUK has warned increasing the tax could impact the party politically. 

He said: “Motorists are fiscally penalised enough, hitting them with a punitive Budget increase in duty will be politically and economically naïve.”

Published at Wed, 24 Feb 2021 07:56:00 +0000