Rise in fuel duty would cripple families this winter, Labour warned
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By JASON GROVES, POLITICAL EDITOR
Published: | Updated:
Labour is under pressure to scrap plans for a 7p rise in fuel duty amid warnings it will cripple family finances this winter.
Ministers have lined up a triple whammy of fuel duty rises at the start of next year as they try to plug a hole in the public finances.
But campaigners on Sunday night urged Chancellor John Healey to use next month's Budget to ditch the plans drawn up by his predecessor Rachel Reeves.
Pump prices have risen to levels not seen since the start of the Ukraine war as the crisis in the Middle East intensifies.
According to RAC Fuel Watch, the average litre of unleaded has jumped to 172p, while diesel now costs an average 195.3p. Many forecourts have already pushed the price of diesel above £2.
Howard Cox, of campaign group Fair Fuel UK, said rising prices were 'not just numbers on a chart... they are a direct blow to household budgets, people's ability to work and their freedom to drive'.
Campaigners have urged Chancellor John Healey (pictured) to use next month's Budget to ditch plans drawn up by his predecessor Rachel Reeves
Mr Cox added that 40 countries have cut fuel duty in response to the Middle East crisis, and urged Mr Healey to follow suit.
He told the Daily Mail: 'If ministers want a policy that delivers real, tangible benefits within weeks, not years, they should start with the lever that works – cut fuel duty. It is time to stop taxing the engine of the economy and start powering it instead.'
A temporary 5p cut in fuel duty was introduced by the last Conservative government after Russia's invasion of Ukraine in 2022 had sent prices spiralling.
Ms Reeves had planned to phase out the relief this month, but postponed the plan following President Donald Trump's attack on Iran.
Under current plans, fuel duty will now rise by 3p per litre on January 1, with another 2p rise on March 1. The Treasury is also scheduled to end the 16-year freeze on fuel duty next year, adding a further 1p in April. On top of this, VAT will add another 1.2p per litre.
The combined 7.2p increase would add almost £4 to the cost of filling up a family car.
Robert Jenrick, Reform UK's Treasury spokesman, said rocketing petrol and diesel prices were 'a big part of why inflation is now up to 3.1 per cent'.
While Tory transport spokesman Richard Holden said the plans were 'completely untenable in the middle of a cost-of-living crisis'.
Treasury insiders said that 'no decision' has been taken on whether to press ahead with the fuel duty increases, but that retaining the 5p fuel duty cut alone would cost the Treasury £2.4 billion a year at a time when Mr Healey is already struggling to balance the books.
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