Fuel Duty September 2016

Thank you for contacting me recently regarding fuel duty [and the related campaign by FairFuelUK].

I appreciate that fuel prices have a serious impact on household budgets and businesses and that the average price of a litre of petrol or diesel has risen by around 10p this year, and that 80% of households have seen either flat or falling incomes since 2008.

Previously, the Coalition Government's VAT rise from 17.5% to 20% added around 3p to the price of a litre of petrol or diesel and the Opposition voted against it at the time. 

I entirely understand concerns about the stability of the price of fuel, particularly as the 'tax lock' - legislation aimed at ensuring the current Government keep their own promises on tax - does not include increases in taxes such as fuel duty. 

Following pressure from campaigns such as FairFuelUK and others, this year's Budget froze fuel duty, despite figures in last year's Treasury documents suggesting it could rise in line with inflation. I believe, however, that overall the Budget failed to address the big challenges facing the economy and has left working people worse off. I opposed the cuts to Capital Gains Tax and Corporation Tax. If the Government can fund tax cuts benefiting the very wealthiest in our society, money can be found to invest in the economy and for vital public services. 

I believe that a review of how best to stabilise pricing would be sensible. I understand that families and businesses need stability and that price fluctuation is an important issue in need of addressing. I was disappointed that the Government rejected an amendment to the 2016 Finance Bill which called for a review to establish the form of fuel duty regulator which would best ensure stability of pricing. 

I am not convinced that the Treasury has established a sustainable approach to fuel prices and I will follow the Autumn Statement and the choices that the new Chancellor makes very closely.

Thank you once again for writing to me and sharing your views.