Welsh Conservatives call for Chancellor to cut fuel duty in Spring Statement

The Welsh Conservatives have called on Rishi Sunak to cut fuel duty in next week’s Spring Statement.

Pressure is increasing on the UK Government to cut the rate of fuel duty as soaring prices to help families with the cost of living amid increasing diesel and petrol prices.

Fuel price hikes over the past few weeks have brought in a VAT windfall for the Treasury.

The call comes as sanctions on Russia, including the desire for many nations to divest from its oil production, in response to their unjust war on Ukraine, have led to increasing prices at a time when global energy demand is high.

The extra VAT pouring into the treasury because of the record prices at the pumps is more than enough to give drivers some respite and cut Fuel Duty by at least 5p, Fair Fuel UK has said.

Ireland, Poland, Germany are cutting fuel taxes and French Supermarket chain Leclerc are to reduce diesel by up to 30p and unleaded by up to 8p.

Pump prices 12 months ago were circa £1.20/1.25 per litre and are now nearly £1.70. That’s a difference of 45p/litre or nearly £25 more to fill up an average family car. The extra VAT is estimated to be, in the last 12 months on an annualised basis to be about £2.7bn.

Wales’ Shadow Finance Minister has said cutting prices at the pump will help people keep more of their money, allowing them to save more for other essential expenditure.

It will also help boost the economy as businesses, like haulage firms, can remain competitive without spending significantly more on fuelling their fleets.

The Welsh Conservatives call would see fuel prices stabilised as the duty would fall as prices increased. They argue that the VAT share the Government takes from increasing costs would make up for the shortfall in duty while still helping consumers.

The contribution, which would be UK-wide, comes as Chancellor Rishi Sunak sets out in his annual Spring Statement on how he will prepare the UK ahead of a time of rising costs.

Steve Gooding, director of the RAC Foundation, said: “If the Chancellor is looking for ways to help with soaring household bills then an obvious option would be to follow the example set in Ireland and cut the rate of fuel duty to ease the burden of soaring pump prices.

“That would directly benefit the three quarters or so of households that run a car and indirectly help us all by reducing the rising fuel cost pressure on businesses and hauliers that will otherwise inevitably make its way to higher prices on the shelves for consumers.

“Over recent weeks the Chancellor’s tax take from drivers will have risen because VAT is levied as a percentage of the pump price of fuel – including the duty element – so it is not unreasonable to suggest he gives something back while domestic budgets are being squeezed so hard.”

Welsh Conservative and Shadow Finance Minister Peter Fox MS said: “We know that rising global demand for energy is creating a cost-of-living crisis and that the economic warfare the West is waging on Russia for their illegal actions in Ukraine will not make things easier.”

“But the fight for freedom is not free and we must do our best to insulate the British people from the worst of it. If we do not, we risk losing their support in this generational battle against tyranny.”

“The Welsh Conservatives believe that the Chancellor’s Spring Statement provides the right opportunity to protect the increasingly tight budget of families and businesses, and this can be done by a progressive cutting of fuel duty.”

“This is a balanced approach that gives both taxpayers and the Treasury something to help weather the post-pandemic, economic headwinds, something we need in Wales more than anywhere after two decades of Labour’s failure to boost wages.”

“Then, when this terrible conflict in Ukraine is over and Putin in punished for his crimes against humanity, we can confidently and proudly say that we stuck the course and did our bit to preserve freedom in Europe, and it was made easier by the action of a Conservative government.”