Monday, January 23, 2023

Jeremy Hunt accused of “peddling fiction” that fuel taxes should go up every year

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THE Chancellor was slammed for peddling the “fiction” that fuel taxes should go up every year.

By refusing to permanently abolish the fuel tax escalator policy to boost the levy through inflation every April, MPs say budget forecasts produced by the OBR are wrong.

Jeremy Hunt is under intense pressure to keep a 5p fuel tax cut that expires automatically in March unless he intervenes in the budget.

The levy is also set to rise each new financial year due to inflation – but MPs say he must freeze it instead.

Thanks to The Sun’s Keep it Down campaign, every chancellor since 2011 has frozen or reduced fuel taxes, and the Treasury Select Committee is now demanding more honesty that the escalator is as good as dead.

They say the Treasury should stop promising to raise fuel taxes and then reverse them, and instead acknowledge that it has been frozen for more than a decade, as that would mean the OBR can forecast government taxes and spend plans correctly.

Their new report concludes: “We recommend that, in order to provide the OBR with a policy assumption for future forecasts, the Treasury should assume that there will be no inflation-related increase in the fuel tax over the forecast period.

“This would more accurately reflect the recent trajectory of the fuel tax and make for a more credible forecast.”

The committee’s chief, Harriet Baldwin, said: “After years of fictitious tax projections, it is time for the government to more accurately reflect the real path of the fuel tax.

“This would allow the OBR to produce a more credible forecast.”

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