Fuel Duty

Dear constituent,

Thank you for contacting me about fuel duty.

As you will know, at the Spring Statement on 23 March, fuel duty was cut by 5p per litre. I know the FairFuelUK campaign has welcomed this.

However, while the Government said this was aimed at helping people with the cost of living, I am concerned that it does not rise to the scale of the challenge we face.

The Office for Budget Responsibility has confirmed that we are facing the biggest hit to incomes on record this year, with real household disposable income falling over the next two years. Real wages are forecast to fall 2.1% this year and 1.2% next year, while living standards are not expected to return to their pre-pandemic levels until 2024-25.

In this context, and with petrol prices soaring, savings from the fuel duty cut pale in comparison to the cost-of-living crisis households are facing. This includes tax rises elsewhere – we are facing the highest tax burden in 70 years in 2023-24, with a confirmed £24 billion in tax rises this year. Indeed, part of the savings through fuel duty changes will be offset by an increase in vehicle excise duty.

To make a real difference on the cost of living, I believe the Government should have put a windfall tax on oil and gas producers to provide real help for families, scrapped the National Insurance increase and come forward with a proper plan to support businesses with the unprecedented rise in costs they are seeing. Unfortunately, the Chancellor did not make that choice.

Thank you once again for contacting me.

Yours sincerely,

Peter Dowd MP