Treasury wobble: Reeves poised to ditch autumn budget fuel duty hike as fairfueluk pressure tells

"According to Treasury sources briefing the FairFuelUK campaign, Chancellor Rachel Reeves is preparing to drop the planned fuel duty rise from her Autumn Budget, though insiders caution that any reprieve is unlikely to survive beyond the March 2027 Financial Statement. The retreat, if confirmed at the despatch box, will be the latest chapter in a saga that has become a fixture of every fiscal event since George Osborne first froze the duty in 2011."

"Since hostilities flared in the Gulf, drivers have paid an estimated £3 billion more to fill up, while the Treasury has banked close to an additional £500 million in VAT receipts off the back of higher pump prices alone. Oil majors, predictably, have reported bumper margins. The motorist, equally predictably, has been left to foot the bill."

"That contrast - soaring corporate profits set against a stagnating consumer economy - is what has put fuel duty firmly back on Reeves's desk. As Business Matters reported last month, the Middle East flare-up has dragged headline inflation back to 3.3 per cent, hitting transport-heavy SMEs hardest of all."

"FairFuelUK says more than 71,000 of its supporters have now emailed their MPs urging the Chancellor to abandon the Budget hike. A separate petition, which has gathered more than 148,000 signatures, will be hand-delivered to the Treasury in the coming weeks. The campaign is calling not only for the freeze to be extended but for an immediate cut in fuel duty, in line with measures taken by more than 40 other countries."

A planned fuel duty rise may be removed from the Autumn Budget, with uncertainty about how long any freeze would last. Fuel duty has been repeatedly adjusted since 2011, affecting drivers and small businesses. Drivers have paid an estimated £3 billion more since the Gulf conflict began, while the Treasury has gained about £500 million in additional VAT from higher pump prices. Oil companies have reported higher margins, while consumers face higher costs. Fuel duty is again a focus because Middle East flare-ups have pushed headline inflation to 3.3%, hitting transport-heavy SMEs. FairFuelUK is urging MPs to abandon the hike, citing 71,000 emails and a petition with 148,000 signatures, and calls for an immediate cut aligned with other countries.

Read at Business Matters