Boost for motorists as Jeremy Hunt freezes fuel duty again in Budget

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Jeremy Hunt has handed a Budget increase to motorists as the chancellor opted to maintain fuel duty frozen for the 14th 12 months in a row.

In a transfer anticipated to value the Treasury round £5bn, Mr Hunt as soon as again prolonged the 5p lower in fuel duty introduced by Rishi Sunak in 2022 as wholesale costs soared in the wake of Russia’s invasion of Ukraine.

Despite an unforgiving financial panorama, the chancellor is beneath strain to entice voters with tax giveaways forward of this 12 months’s normal election, with latest polling placing the Conservative Party’s recognition at a 45-year low. Tory MPs and The Sun have lengthy campaigned for the fuel duty freeze.

Announcing the measure, Mr Hunt mentioned: “The labour mayor of London wants to punish motorists even more with his ulez plans but lots of families and sole traders depend on their car. If I did nothing fuel duty would increase by 13 per cent each months.”

He added that he could be listening to his fellow Tory MPs and The Sun marketing campaign and freeze fuel duty for one other 12 months, which he claimed would save the typical British family £50 subsequent 12 months.

The extension will present some aid to motorists who noticed the price of petrol soar to £1.91 per litre in June 2022. That has now fallen to £1.45 per litre, which stays nicely above a low of £1.01 in 2016, in response to the RAC.

But the motoring group has expressed concern that the fuel duty lower is just not being handed on to clients, warning final December that forecourts had pocketed an additional £184m in the 2 months prior by failing to replicate the lower in their costs.

And, at a value of round £74 per UK resident if estimated to complete £5bn, it’s no small feat for the chancellor to maintain the duty frozen. As reported by Politico, Mr Hunt was solely deemed to have met his fiscal guidelines in the Autumn Statement as a result of an assumption by the Office for Budget Responsibility (OBR) that fuel duty would improve in March.

The OBR warned final autumn that freezing fuel duty would wipe out 43 per cent of the chancellor’s “headroom” in 2028-29 and would imply the nationwide debt would now not be falling, the web site reported.

The choice can be of no minor consequence to the UK’s local weather ambitions, with evaluation by the web site Carbon Brief suggesting that cuts and freezes to fuel duty since 2010 have resulted in highway site visitors CO2 emissions being 24 per cent greater – and the UK’s general CO2 output 7 per cent larger.

The announcement got here hand-in-hand with Mr Hunt’s announcement that he would even be extending an alcohol duty freeze in a win for pubs combating the price of residing squeeze.

The chancellor mentioned he was extending the freeze, benefitting 38,000 pubs throughout the UK, for an extra 12 months after protecting the duty unchanged in his Autumn Statement.

Traditionally, alcohol duty charges rise annually in line with inflation however over the previous decade chancellors have opted to freeze them.

Many pubs have struggled to get well from misplaced enterprise throughout the Covid pandemic and have been hammered by rising prices amid the price of residing. The rising worth of a pint has put many punters off going out for a drink and hundreds of pubs have been compelled to shut as a end result.

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