ROAD RAGE
Duty calls
WHITEHALL has woken up to its mounting road vehicle revenue losses (
Eyes passim ad nauseam
) but still lacks a credible fiscal plan for the transition to electric power.
Chancellor Rachel Reeves froze fuel duty yet again for next year but will at least phase out, from September next year, what was meant to be a one-year 5p cut per litre in 2022. She plans to raise fuel duty in line with RPI inflation thereafter.
If she and her successors don’t U-turn, the revenue loss will be £2.4bn in 2026-27 and £900m each following year, compared with if fuel duty had stayed constant in real terms. In October the Office for Budget Responsibility (OBR) said that scrapping the 5p cut and raising fuel duty with inflation from 2025 would have raised £4.8bn annual revenue in 2029-30.