Oral Answers to Questions

Robert Halfon Excerpts

Tuesday 11th September 2018 Commons Chamber

[Robert Halfon (Harlow) (Con)]

9. What assessment he has made of the effect of the fuel duty freeze on household incomes.

[The Chancellor of the Exchequer (Mr Philip Hammond)]

To support British households, the Government have frozen fuel duty for eight successive years. By April 2019, these freezes will have saved the average car driver £850 compared with the pre-2010 escalator, and the average van driver over £2,100, but it is important that we remember the other side of this coin. The fuel duty freezes since 2011 have meant that the Exchequer has forgone around £46 billion in revenues through to 2018-19, and a further £38 billion will be forgone over the Budget forecast period, as a result of these previously announced freezes. For context, that is about twice as much as we spend on all NHS nurses and doctors each year.

[Robert Halfon]

A Treasury study in 2014 said that freezing fuel duty benefits the economy to offset almost all the loss of tax to the economy, and it said that GDP would increase by £4.5 to £7.5 billion over the forthcoming years. Given the rise in petrol by 13p and diesel by 15p over the past year, does he agree with his own Treasury report that maintaining the fuel duty freeze would benefit the economy and help hard-working people in our country?

[Mr Hammond]

The analysis that my right hon. Friend refers to is from 2014, and obviously that analysis would have to be looked at again in the context of the economy today. I do understand that the way the rise in oil prices has had feed-through to the pump represents a real pressure for motorists, and we will take it into account.