DOES this Government really want to stimulate the economy?
Because just now it seems like the answer is NO.
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As The Sun revealed on Saturday, unaccountable Treasury officials want Chancellor Jeremy Hunt to put fuel duty up by 2p a litre in next week’s Spring Budget.
Why would any Chancellor sanction a fuel tax rise that would shrink the economy, increase inflation and add more to the dole queue?
By increasing duty on petrol and diesel that nightmare scenario is on the cards a week tomorrow.
For more than a decade The Sun’s Keep It Down campaign, run with FairFuelUK, has successfully kept fuel duty frozen.
And last year, as the war in Ukraine sent the price of petrol and diesel through the roof, the Government heeded our advice and cut the tax on motoring by five pence a litre — although other countries slashed it by even more.
“Experts” at the Treasury are now saying they need to increase fuel duty because keeping the freeze will cost the Government £6billion.
They point to the fact that prices at the pump, especially petrol, have dropped recently as an excuse.
But they seem to forget that pump prices are still far higher than they should be because falls in the wholesale cost of fuel have not been passed on by greedy oil companies.
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Research for FairFuel UK by respected economists at the Centre for Economics and Business Research has shown that freezing fuel duty since 2011 has been highly successful.
By their calculations freezing duty has reduced the Consumer Prices Index by 6.7 per cent compared with where it would have been by 2018, as well as boosting household expenditure by £24billion.
Bringing the projection to 2023, they calculate that the freeze in fuel duty benefit may have kept our economy out of recession.
Load of claptrap
Had it not been in place, there is no doubt UK Plc would now be bankrupt.
It would be bizarre and disastrous to the economy to change a policy that has been so successful.
Fuel duty is a regressive tax and hits the poor hardest.
Any increase will impact badly on low-to-middle income taxpayers, van drivers and truckers, while well-off Tesla drivers won’t notice a thing.
If this odious and much-despised tax is going to rise by 2p a litre then, Chancellor, you can wave goodbye to all those hard-earned red wall Tory seats.
Even Labour are sensibly calling for fuel duty to remain frozen.
Don’t fall off your chair, you heard right — Shadow Chancellor Rachel Reeves is demanding Jeremy Hunt spares drivers from a fuel tax increase at the pumps in next week’s Budget.
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It seems Labour’s special advisers recognise that British drivers, who are among the world’s highest taxed motorists, do vote at elections.
The Treasury are saying that keeping fuel duty unchanged would be the biggest single expense of the Budget.
What a load of claptrap!
This economic naivety is being driven by pressure from well-financed, ill-informed environmentalists who want the internal combustion engine to be made extinct.
They totally ignore the reality of market dynamics.
Lower petrol, and especially diesel, prices bring down inflation, reduce business costs and food prices while, at the same time, increasing consumer spending, investment, and jobs.
The inevitable rise in disposable income that follows drives more growth taxes for the Exchequer, all to be invested back into public services. This is economic common sense.
And let’s not forget the massive subsidies afforded to electric vehicle users, who pay just five per cent VAT on home charging and 20 per cent on public charging.
Compare that to the 30million drivers of internal combustion vehicles who pay 50 per cent in duty and VAT.
And petrol and diesel fill-ups include 20 per cent VAT on the fuel duty, which in itself is an immoral tax grab — paying tax on tax.
There is no doubt that fighting inflation is laudable strategy.
That is why millions of people with common sense are aghast and wondering why Jeremy Hunt has not done exactly what he and the Prime Minister espouse — cut consumer taxes.
They have had enough time to put all of us out of our cost-of-living crisis misery but seem wedded to the journey of economic stagnation.
Their advisers seem to have prevented tax-cutting policies, including reducing fuel duty, from happening. This will cost the Tories at the ballot box.
Needless tax take
Millions of voters — many without a political home — are simply going through the motions by going to work to reluctantly supply the Treasury with the highest sustained level of tax seen in the UK since the aftermath of the Second World War.
The Office of Budget Responsibility say our tax burden will hit a record high of 37.5 per cent as a share of GDP in 2024-25.
This level of needless tax take, if maintained, will see UK’s growth wither and die.
It will also signal the end of the Conservative Party as the voice of business, low taxes and small state, doomed to the opposition benches for a generation.
Keep fuel duty down, Chancellor, make this a Budget of growth and not a political suicide note.
