Chancellor wants to freeze fuel duty until end of this Parliament

Chancellor of the Exchequer George Osborne today told Conservative Party conference that he intends to freeze fuel duty until the end of the Parliament.

RAC technical director David Bizley said: “The Chancellor’s intention to extend the freeze on fuel duty is welcome, but it’s time for the Government to consider a more radical overhaul of the motoring taxation regime so that fuel poverty becomes a distant memory for those in our society with low income but still have a high dependence on their vehicles.”

“There is, in fact, good evidence that the Treasury coffers would benefit more if he were to reverse the trend and cut fuel duty for struggling motorists.

“Year on year, receipts from petrol and diesel have begun to slowly decline since 2010 when the coalition was formed. Combined petrol and diesel consumption has fallen 6.6% from 48.3bn litres in 2008 to 45.1bn litres in 2012 while fuel duty revenue actually increased by £2bn (£24.1bn to £26.1bn – an 8% increase) due to duty increases of more than 7p a litre in that period.

“The numbers are a clear illustration of the dilemma in which the Government finds itself. The recession has taken its toll over the last five years and this, combined with motorists driving more fuel efficient, environmentally-friendly vehicles means that Government would need to increase fuel duty at above the rate of inflation, just to maintain tax revenues from fuel.

“Many motorists are suffering genuine hardship as a result of the cost of fuel for essential journeys to the shops, to work and to support their families so fuel duty can no longer be treated by the Treasury as a cash cow.”