‘Head in the sand’: Fuel duty freeze to save drivers £1,900 but transition to EVs unclear

Sky News: Rishi Sunak and host Kate clash over fuel duty

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The Chancellor of the Exchequer, Rishi Sunak, announced that the Government will keep fuel duty frozen for the 12th consecutive year at 57.95p per litre UK-wide for 2022-23. According to the Budget document, the freeze is worth £7.85billion over the next five years and saves the average UK car driver a cumulative £1,900, compared to the pre-2010 escalator.

Mr Sunak recognised that fuel is a major cost for households and businesses and because of this, did not want to raise the fuel tax.

In response to the Budget announcements on fuel duty, RAC fuel spokesperson Simon Williams said: “We welcome the Chancellor’s confirmation that duty will continue to remain frozen at 57.95p a litre.

“With pump prices at record highs, now would have been the worst possible time to change tack and hike up costs still further at the forecourt.

“If duty had gone up, RAC data suggests the average price of a litre of petrol could have reached 147p taking the cost of a tank to over £80, and diesel an eye-watering 150p.

“But we’re disappointed he did not provide some respite for drivers at the pumps.

“As VAT is charged on the final cost at the pumps, a temporary cut in VAT to motor fuels would have benefitted drivers immediately at a time when filling up the car is hurting household budgets more than ever before as well as the wider economy as people will have less money to spend.”

The Budget also confirmed a previous announcement involving a £620million investment to support the transition to electric vehicles.

This is set to involve a boost to public charging in residential areas and targeted plug-in vehicle grants.

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Despite this, Tim Lord, a senior fellow at Net Zero and Christina Palmou a senior economist, slammed the Government for its priority of short-term changes.

They said: “Yet another freeze in fuel duty suggests that the Government has its head in the sand about the electric vehicle transition and the threat to tax revenues.

“In what is an increasingly characteristic approach from the Chancellor, he’s prioritised short-term tweaks over long-term strategy by freezing fuel duty yet again, while saying almost nothing about the much bigger challenge ahead: the loss of over £30billion of tax revenue as we transition to electric vehicles.

“While the freeze to fuel duty can be justified by recent increases in fuel prices – and will have a relatively small impact on UK carbon emissions – the decision to ignore the implications of a transition with impacts on this scale is harder to defend.

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