EXCLUSIVE: Another day, another tax raid. After 14 years of fuel freezes, campaigners claim Labour is plotting to whack Britain’s 37 million motorists with a 10p fuel duty increase in the Autumn Budget.
Fleeced at the forecourt? Campaigners claim plans are afoot to hike fuel duty (Image: Getty)
Rachel Reeves is gearing up to clobber motorists with a massive 10p fuel hike in the autumn, it is claimed. Although today’s Spending Review will not include any new tax measures, sources say the Chancellor is expected to lay the groundwork for “inevitable increases” in the Budget pencilled in for late October or early November.
Campaigners are now worried Labour will pull the plug on 14 years of fuel duty freezes and unleash war on Britain’s 37 million motorists by fleecing them at the forecourt in a matter of months. Lobby group FairFuelUK has demanded Fuel Duty be frozen for the lifetime of this Parliament, but its founder, Howard Cox, fears road users will be seen as the easy option and clobbered at the pumps.
In a sensational revelation, he said: “We have heard from reliable Whitehall sources that the Autumn Budget will introduce a 10p increase. That’s a reversal of [former prime minister Rishi] Sunak’s 5p Covid cut, plus an additional 5p per litre that will impede economic growth.
“Filling up an average family car following such a punitive tax hike, including the egregious double tax of VAT, will cost an extra £6.60; an average Transit, £15 to £20; and a large HGV, at least an additional £70.
“Some armchair experts argue that restoring or unfreezing fuel duty could generate more than £3 billion a year. Absolute tosh!”
Another tax raid? Sources claim Labour is plotting a tax raid on motorists (Image: Getty)
Today’s Spending Review is expected to reveal a slew of spending plans that could necessitate raising additional taxes in a bid to boost economic growth.
Despite lower pump prices, the UK’s annual inflation rate, as measured by the Consumer Prices Index, stands at 3.5%, largely due to higher household energy bills, transport costs, airfares, and council tax. In April the rate was considerably higher than France (0.9%) and Germany (2.2%).
In Britain drivers face a double whammy at the pumps with fuel duty, a form of excise tax, levied at a flat rate of 52.95 pence per litre for both petrol and diesel. This rate has been frozen since 2011-12.
In addition to fuel duty, VAT is also charged on both the product price and the duty at a rate of 20%.
Mr Cox said: “The freeze on this regressive tax since 2011 means drivers have spent more of their disposable income, if any, in the economy, and businesses have remained solvent due to lower-than-expected transport costs.
“No other tax has such a profound impact on economic growth, inflation, employment, and business investment as the substantial tax on filling up at the pumps. Every corner of our nation depends on road transport for construction, small trade contractors, food, clothing, internet deliveries, postal services, medical support, family cohesion, community interaction, and mental well-being.”
Road to nowhere: filling up a family car would cost an extra £6.60 if fuel duty rises by 10p (Image: Getty)
Diesel in the UK is now the most heavily taxed fuel in Europe. In Spain, it is taxed 21p less, in Germany 13p lower, and in the Netherlands 25p below the UK. The average diesel fuel tax across Europe is 15p lower than that of the UK.
Mr Cox said: “The left, and, of course, the well-funded, environmentally conscious greens, will be salivating with delight at the thought of an end to a decade-and-a-half freeze on fuel duty. They do not understand how to run an economy; instead, they aim to consolidate total control in the hands of wealthy, unelected idealists.
“There are few avenues for further tax increases. This duplicitous and dishonest government has already targeted pensioners, farmers, private education, and SMEs, and remains clueless about how to deliver a concrete solution to the cost-of-living crisis.
“Rachel Reeves finds herself caught between a rock and a hard place. That rock is Deputy Prime Minister [Angela] Rayner, along with Ed Miliband, the Net Zero fantasist. The hard place is the betrayed electorate, which granted Labour a substantial political majority due to the failures of the Tory Government.
“She will need to pull a financial rabbit out of the hat to avert punitive tax rises. She will have no choice but to impose additional heavy burdens on working people as the Government faces its next significant test of fiscal policy.
“Her speech will shape the direction of public services and their levels of budgetary funding, while also influencing Labour’s chances of remaining in power.”
