Fuel duty cut off in Spring 2022 declaration ‘inevitable’ as Rishi Sunak drops a big hint

Chancellor Rishi Sunak issued his Spring Declaration of 2022 on Wednesday – and he hinted that he could reduce fuel tariffs after rising prices due to the Ukraine-Russia war

Rishi Sunak has raised hopes that he will reduce his petrol duty when he delivers his mini-budget this week.

The call has grown for the Chancellor for Heavy Motorists to throw a lifeline on Wednesday spring after the average liter lead rose to over £ 1.60 after the Russian invasion of Ukraine.

The chief economist of the Resolution Foundation think tank Adam Corlett said: “Fuel consumption cuts to relieve the pressure on the petrol pump will inevitably be part of the package announced this week.”

Mr Sunak dropped a huge hint yesterday, and there is speculation that he could go for a cut of 5p or even 10p per liter of fuel, from the current duty of 58p.

Labor said it would not oppose such a move.

But Shadow Chancellor Rachel Reeves warned: “Even a 5p reduction in the fuel tax will reduce the car’s filling of petrol by just £ 2, so I do not think that really goes on the scale of the challenge that we set the moment.

The Mirror understands that the Chancellor was reluctant to announce a cut due to the fact that it cost the Treasury billions without having a major impact on families.

There are also fears that any cuts – which would do little to help the British who cannot afford a car – would be a permanent blow to Britain’s non-zero climate targets.

But the Independent reports today that the Chancellor has asked the Office for Budget Responsibility to draw up last-minute new forecasts due to a possible change in policy.

Resolution Foundation director Torsten Bell told BBC Radio 4’s Today program: “I think fuel consumption is now almost inevitable. We’ve seen prices at the pump go up by 40p last year.

“Two things tell us that one is coming – it’s the recent history of British politics, which has frozen fuel duty every year since 2010 and when major energy price shocks occur, we tend to see reductions in fuel duty.

“And around the world we see exactly that happening, be it through rebates in France or over mandatory reductions in Sweden or Belgium or the Netherlands.

“So I’m afraid it’s absolutely certain that this will be a big part of the package this week.”

Mr Bell said the cut would make “a little difference” for “heavy fuel consumers”, but a 10p cut could cost £ 5 billion and would be “likely” to become permanent.

He called on the Chancellor to raise a real benefit – which would provide almost four times more support for low- and middle-income families than abolishing a national insurance move.

The financial performance takes place as families struggle with a cost of living crisis, with fresh pains set to steal household budgets next month.

As well as a rocket inflation rate of 5.4% – tipped to hit 8% within weeks – the British also have rising city council tax bills, a national insurance increase to fund attempts to address record NHS waiting lists and a £ 693 surge in energy prices, leading to an increase of 50% in dual-fuel bills.

An analysis by the Resolution Foundation compares the impact of three potential policies, each costing around £ 9 billion.

They include raising all working age and pensions by 8.1% instead of 3.1% as planned; Deduction of the driving national insurance contributions for less income due to the increase in the threshold at which they start paying at £ 12,500; and the increase of 1.25% in total.

The think tank says the increase in benefits “provides the largest cash gain of the three policy options over the lower half of the income distribution”.

Asked yesterday about a potential fuel cut, North York MP Mr Sunak told Sky News’s Sophy Ridge on Sunday: “I have a rural constituency, people are incredibly dependent on their cars and this is one of the biggest bills people have. confront.

“Look how it goes up – we see it all when we fill up our cars. I understand that, so we’ve already frozen fuel duty.”

Conservative MP Robert Halfon said it was “absolutely vital” that the government reduced the fuel duty to alleviate the severe cost of living crisis.

Labor renews claims for a windfall tax on North Sea oil and gas companies.

With prices rising so fast this year, performance would generate £ 3.7 billion to help “keep bills low” – £ 2.5 billion more than calculated in January, said Rachel Reeves.

Shadow Chancellor told BBC1’s Sunday Morning Show: ‘What is needed is a windfall tax on the huge profits that are now being made by North Sea oil and gas companies and that money is being used to take money from people’s greenhouse gas and electricity bills , because everyone pays the gas and electricity bills and it is the poorest people – people with low and modest incomes – who experience the price increases the most.

“My priority would be to keep the windfall tax on energy bills low and also not keep up with the increase in national insurance contributions.”

Mr Sunak said the Treasury had already announced a £ 9 billion package to help people with energy bills – “£ 350 support for people”.

He added: “They will receive £ 150 of that in April, so where we can make a difference, we will of course. But I understand that this is difficult.”

Meanwhile, Boris Johnson is today organizing a “Roundtable” meeting of nuclear power plants to discuss new projects.

The Prime Minister believes that strengthening the UK industry will make it less dependent on foreign energy supplies and protect families against rising bills through price increases in world markets.

Only one new nuclear power plant is under construction – Hinkley Point C in Somerset – and nuclear power supplies only 15% of UK electricity.

The aging fleet of current nuclear power plants is slowly being withdrawn – meaning the UK needs to replace them or find other energy sources.

The PM is set to release a UK Energy Security Strategy this month.

A fresh push is expected for onshore wind farms, to include more nuclear power plants and to open the door to shale gas fracturing – if the sector can provide new safety guarantees.

Execution Secretary Helen Whately is set to hold talks with bank chiefs lending cash to the North Sea oil and gas sector to discuss plans to pump more cash into potential fields.

Shadow Chancellor Ms Reeves signaled Labor’s opposition to more drilling, citing fears of climate change.

“I do not think the answer to a fossil fuel crisis is more fossil fuels,” she said.

“There are better things the government could do, such as ending the moratorium on onshore winds, than continuing to invest in new nuclear power plants.”