Motorists have been cautioned that Rachel Reeves may get rid of a popular motoring rule come November. The Labour Chancellor is said to be facing « enormous pressure » to eliminate the 5p fuel duty reduction at the Budget on November 26.
This pressure persists despite Labour’s manifesto pledge. Insiders suggest the party wishes to terminate the ongoing pretence of claiming duty will increase – despite it never actually happening.
British fuel duty has remained frozen since 2011, reports Birmingham Live.
Ms Reeves declared this week: « We will face further tests, with choices to come, made all the harder by harsh global headwinds and long-term damage to the economy, which is becoming ever clearer. »
Last November, during her inaugural Budget, Ms Reeves confirmed the temporary 5p reduction would also stay in effect.
Ms Reeves said: « The budget I inherited assumes that fuel duty will rise by RPI next year, and that the temporary 5p cut will be reversed.
« Keeping the 5p cut and freezing fuel duty would cost over £3 billion next year. Given the challenging fiscal position, I must be frank with the House-this is a significant commitment.
« In these tough times, with high living costs and global uncertainty, increasing fuel duty next year would be the wrong choice for working people. It would mean a 7p per litre rise in fuel duty.
« So, I have decided to freeze fuel duty next year and maintain the existing 5p cut for another year. »
The Chancellor, who will present her fiscal statement on November 26, continued at the time and said: « There will be no higher taxes at the petrol pumps next year. »
Ms Reeves is grappling with the challenge of balancing shrinking government funds with a promise of no tax hikes for working Brits.
There were concerns last autumn that the Chancellor might raise fuel duty by up to 7p to help plug a £40bn gap in the nation’s finances.
