Rishi Sunak comes under pressure not to hike fuel duty by 5p per litre

Don’t punish the truckers! Rishi Sunak comes under pressure from motoring groups not to hike fuel duty by 5p amid fears it could cost hauliers £2k each

• Cross-party report says fuel duty hike would threaten UK’s post-Covid recovery
• MPs’ report says rise would add up to £2,250 a year to average haulier’s fuel bill 
• Fuel duty has been frozen at 57.95 pence per litre for petrol and diesel since 2011
• Chancellor reportedly considering hike of up to 5p per litre in upcoming Budget

Rishi Sunak is facing rising pressure not to hike fuel duty as a report today warns it could ‘devastate’ the UK’s road haulage industry.

Motoring groups have already urged the Chancellor not to raise the levy, warning it would clobber hard-pressed families.

But today’s report, by a group of cross-party MPs, says it would also threaten Britain’s post-pandemic recovery by adding up to £2,250 a year to the average haulier’s fuel bill.

Chancellor Rishi Sunak is being urged not to punish truckers by a cross-party group of MPs as he is rumoured to be considering a fuel duty hike in the upcoming Budget next month

MPs: CUT VAT ON GREEN GOODS 

VAT should be cut on repair services and products made with reused or recycled materials to boost a green recovery from the pandemic, MPs have urged.

The Commons environmental audit committee (EAC) also called for tax incentives to make electric vehicles and home energy efficiency measures more affordable.

Committee chairman Philip Dunne told Chancellor Rishi Sunak that Britain needs a tax system ‘reset’ to help it make the change to producing ‘net zero’ emissions.

The committee also said the Government should look into an economy-wide carbon tax and tax imports on their carbon footprint.

An EAC report, published amid controversy over plans for a new coal mine, airport expansion and road building, said all infrastructure decisions should take into account the net zero target.

Mr Dunne said: ‘The Covid-19 crisis must be treated as a wake-up call. The economic recovery will shape our national economy for decades to come. It is crucial that tackling climate change and restoring nature is at its core.’

This could put many out of business or see rises passed on to consumers, increasing the price of goods.

The report also warns a hike risks handing an even bigger competitive advantage to European hauliers whose fuel duty bills are much lower.

Fuel duty has been frozen at 57.95 pence per litre for petrol and diesel since 2011, but Mr Sunak is rumoured to be considering a hike of up to 5p per litre in next month’s Budget.

The report, by Parliament’s Road Freight and Logistics group, warn that Mr Sunak must ensure measures in the Budget ‘do not hold back’ the industries.

The report says a 44-tonne articulated vehicle covers roughly 75,000 miles a year, using around 41,000 litres of fuel at an estimated cost of £35,257 before VAT.

But for every penny fuel duty is raised, around £450 will be added to every truck’s fuel bill.

A 5p rise would therefore add £2,250. 

Comparatively, the average levy on diesel for EU countries is just 39.99 pence per litre.

The report adds: ‘This research reinforces that our current fuel duty regime is placing UK hauliers at a significant competitive disadvantage and that any increases would only entrench and worsen this.’

It looked at four scenarios: Hiking fuel duty by 2p; keeping it frozen; cutting it; and offering rebates to hauliers.

It concludes the first option would likely wipe a minimum of £600million off UK GDP.

The Centre for Economics and Business Research has said that an increase of 2 to 3p would initially bring in only about an extra £470million.

More than half of hauliers surveyed said keeping the levy frozen would be ‘positive’ or ‘very positive’ for business.

Fuel duty has been frozen at 57.95 pence per litre for petrol and diesel since 2011, but Rishi Sunak is rumoured to be considering a hike of up to 5p per litre in next month’s Budget

Most were in favour of a cut or rebates by designating lorry drivers as ‘essential’ road users.

The report concludes that rebates of up to 15 pence per litre should be offered to hauliers.

Tory chairman of the group Mike Penning said: ‘For far too long our hauliers have been hit with the highest rate of fuel duty in Europe.

‘The Chancellor can send a powerful statement about the value of the industry by ending this penalty through the introduction of an essential user rebate bringing us in line with our European neighbours.’

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