Challenge… Rishi says he understands the pain drivers face when filling up
The Chancellor said he knows record pump prices are “one of the biggest bills people face” and pledged to make a difference where he can. But Conservative MPs sounded a “red alert” on soaring petrol and diesel charges. They claim drivers face a “de facto lockdown” since filling up their vehicle’s tank will be unaffordable.
They urged Mr Sunak to go much further to ease a massive spike in living costs, by ditching April’s National Insurance rise and removing VAT from domestic energy bills.
The Chancellor is believed to be wrestling with how to make a fuel duty cut work in practice, in the face of pump prices that are rising almost daily.
Treasury insiders have insisted repeatedly that his spring statement will not contain any major announcements and Mr Sunak said yesterday he could give no details of Wednesday’s mini-Budget spring statement in advance.
But he made it clear that, because he represents a rural constituency, he understands the pressure on motorists.
The MP for Richmond, North Yorks left the door open to other measures to soften the blows for households which struggling with rocketing costs.
Mr Sunak said: “Obviously I can’t comment on specific things.
“But what I would say, I understand that…I have a rural constituency, people are incredibly reliant on their cars and this is one of the biggest bills that people face, watching it go up.
“We’re all seeing that, when we’re filling up our cars. I get that, that’s why we’ve frozen fuel duty already.”
The Treasury has already announced plans to offer financial support to consumers through a £150 council tax rebate to some households and a repayable £200 saving on energy bills this year.
The Chancellor continued: “Without question, this is people’s number one priority – I get that, and I know how difficult it is when you are working hard and seeing the price of everything go up every day, every week.
“The steps we have taken to sanction Russia are not cost-free for us here at home, and I want to be honest with people that it is not going to be easy.”
“I wish Government could solve absolutely every problem and that I could fully protect people against the challenges that lie ahead, but I can’t.
“But what I would say is that I will stand by them in the same way that I have done in the past couple of years.
“Where we can make a difference, of course we will.”
Forecourt fuel prices have risen sharply since Vladimir Putin’s invasion of Ukraine, with global oil prices soaring.
Filling stations now charge on average a record 165.9p per litre for petrol and 177.3p per litre for diesel.
More than 50 Tory MPs last week wrote an open letter calling for fuel duty to be cut and warning that running a car is fast becoming “unaffordable for millions”.
Robert Halfon MP, the leading campaigner on keeping fuel costs down, said last night: “We are in red alert.
“If we are not careful we will face a de facto lockdown because millions of people will not be able to afford to drive their cars and businesses will not be able to afford the things that they do because of the cost of transportation. There is real fear. The public are terrified about petrol costs and energy costs at home.
“It is absolutely vital that the Chancellor acts in the spring statement and I welcome what he said.”
The Chancellor is believed to be wrestling with how to make a fuel duty cut work in practice
Tory ex-Cabinet minister Sir John Redwood declared that “not enough” was being done to tackle the cost of living crisis. He said: “I’m happy to have a fuel duty reduction but we need to get rid of the National Insurance charge, we need to get VAT off domestic fuel, we need to get VAT off green products for improving fuel efficiency.”
He added: “This is a major threat to our standards of living. The tax burden is increasing far too quickly. The Chancellor has to reverse his ill-advised tax rises.”
Tory MP Craig Mackinlay, the chairman of the Fair Fuel all-party parliamentary group for motorists and hauliers, said: “With the highest fuel prices ever recorded and other cost of living pressures coming into view, it is little wonder that the public are having to make tough decisions on personal finances with car use being minimised.
“The car offers flexibility, independence and freedom. These are core Conservative values. The Chancellor needs to offer relief and it is in his hands to do so, else communities will suffer.” Howard Cox, founder of campaign body FairFuelUK, urged Mr Sunak to “incentivise consumer spending and stimulate growth. That’s the way to increase Treasury income.
“Cancel the NI rise and get back to traditional Tory values. Drop the ineffective green levies, cut fuel taxes and stop the greedy, rich fuel supply chain fleecing the UK’s 37 million drivers. All of these proven stimuli to the economy are in your power.”
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Labour said that it would not “stand in the way” if Mr Sunak wants to cut fuel duty. But the Shadow chancellor Rachel Reeves warned: “Even a 5p reduction in fuel duty will only reduce filling up the car with petrol by £2.”
Martin Lewis, founder of consumer website MoneySavingExpert, said the “vast likelihood” was that energy bills would go up by around £600 when the autumn price cap is announced. He called for Government intervention to ease the cost of living crisis.
Modelling by the TaxPayers’ Alliance pressure group predicts the 1.25 percent National Insurance rise will lead to the UK economy being £24billion smaller over ten years. John O’Connell, chief executive, said: “Hiking National Insurance will not only hit people’s pockets, but stifle the wider economy too.”
Mr O’Connell continued: “Bumper growth is what we need to tackle the colossal cost of Covid, not tax hikes which will see jobs and investment stall.
“The Chancellor should instead go for growth, and give taxpayers and businesses a respite from tax rises by scrapping the health and social care levy.”
John Longworth, chairman of the Independent Business Network, said: “With the country’s finances in disarray, families facing a cost of living crisis and our energy security uncertain, it’s essential the Government takes bold decisive actions now.
“We need a solid agenda of tax cuts and radical regulatory reform. This budget will test the Chancellor’s mettle”.