Philip Hammond is set to freeze fuel duty, but is coming under intense pressure to cancel the 3p-a-litre rise
Fuel duty is set to be frozen in next month’s Budget, Philip Hammond hinted yesterday.
The Chancellor is under intense pressure to cancel a 3p-a-litre rise in pump prices that is due to come in next April.
The Treasury has declined to comment on the status of the rise, which would be the first since 2010.
But, in a significant move, the Chancellor highlighted the seven-year freeze yesterday as he briefed the Cabinet on measures the government is taking to ease pressures caused by the rising cost of living.
With inflation hitting three per cent last year, senior Tories now believe it would be unthinkable for Mr Hammond to press ahead with the increase.
Charlie Elphicke, a Tory member of the Commons Treasury committee, said: ‘Freezing fuel duty would be the right thing for the Chancellor to do.
‘It has been frozen for seven years and we need to continue that to help hard-pressed motorists and van drivers at a time of rising living costs.’
A report by the Centre for Economics and Business Research this week warned that pressing ahead with the planned rise would cost motorists and the haulage industry more than £6billion.
Howard Cox, co-founder of motoring lobby group FairFuel UK, said: ‘It would be political and economic suicide to increase fuel duty. Any hike will increase inflation, cost jobs and slow fiscal growth.’
But motoring lobby groups have slammed the decision to increase fuel duty as ‘political and economical suicide’, claiming any hike will increase inflation, cost jobs and slow fiscal growth
Downing Street yesterday told reporters the Chancellor had singled out the fuel duty freeze as an example of the way the government was helping hard-pressed families.
The olive branch came as he briefed the cabinet on the need to boost Britain’s flagging productivity.
Mr Hammond has already announced billions to boost infrastructure and training and is expected to go further in next month’s Budget.
Despite the Budget being just a month away, he also invited ministers to submit new policy ideas for possible inclusion in the statement.