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Fuel Duty Hike Planned–To Subsidise EVs

November 24, 2022

By Paul Homewood

There were reports after the Chancellor’s Autumn Speech last week about a hike in fuel duty:

 

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According to the U.K.’s budget watchdog, British motorists will be paying more for their (fossil) fuels next year. A 23% increase in fuel duty will be imposed from March, predicts a paragraph in the Office of Budget Responsibility’s (OBR) backgrounder to today’s Autumn Statement by Chancellor Jeremy Hunt.

The increase would net the U.K. government $6 billion, says the OBR. Chancellor Hunt did not mention the measure in his statement to parliament, 17 November.

“This would be a record cash increase,” said the OBR’s Economic and Fiscal Outlook published earlier today. It would raise the price of petrol and diesel by around 12 pence a litre.

Fuel duty has been frozen in the U.K. since January 2011.

In today’s statement Hunt confirmed that electric cars would become subject to vehicle excise duty, but he did not announce any plans to introduce road pricing.

https://www.forbes.com/sites/carltonreid/2022/11/17/23-fuel-duty-hike-starts-march-2023-but-not-mentioned-in-uk-chancellors-autumn-statement/?sh=3ce29b032ee7 

 

I wanted to wait for the OBR to publish the Supplementary Tables before commenting, and these are now available.

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https://obr.uk/efo/economic-and-fiscal-outlook-november-2022/

As the table shows, revenue from fuel duty is projected to rise by 21% next year, or £5.2 billion. The Chancellor of course has said that nothing has been agreed yet, and that fuel duty would be set in the main budget in March.

Fuel duty was temporarily cut in the March 2022 budget by 5p/litre, from 57.95p to 52.95p. This was intended to partially offset the rising price of petrol and diesel, but was effectively funded by higher VAT receipts on the aforesaid higher prices.

In normal circumstances therefore that 5p cut should only be reversed as pump prices fall back.

But a look at the table shows the real reason why the OBR are projecting an increase of 23%, which would take fuel duty up to 65p/litre. Even with this increase, revenue would still only be £27.9 billion in 2027/28. Before the 5p cut, they were expected to be £28.8 billion this year. Without any increase, those 2027/28 receipts would be £22.7 billion. This shortfall is of course because of the rollout of electric cars.

I estimated last week that the government could face a shortfall of £3 billion in 2025/26 because of EVs, and the OBR indicate that this could grow to maybe £6 billion by 2027/28.

In the absence of any road pricing scheme any time soon, it would appear that other car drivers will have to pay more at the pump to subsidise EV owners.

25 Comments leave one →
  1. November 24, 2022 12:29 pm

    Are there any warm places we could quickly and easily emigrate to? Here, we are being MILKED, in the name of the green ‘cr*p’, with endlessly increasing costs for virtually everything. Our government appears CLUELESS, and most of the people there are hacked-out has-beens. Without a MAJOR change, maybe including REFORM party, possibly allied to UKIP, we’re essentially finished as a nation. Starmer’s shower is NOT a solution!

    • November 24, 2022 12:48 pm

      I would certainly suggest to the younger folk that they abandon us here for their sakes. The UK is locked into 30 years of decline; it will be worse for them than it will for us.

      The question remains: where in the Western world has not drunk the Klimate Kool-Aid?

      • chriskshaw permalink
        November 24, 2022 2:45 pm

        They must move somewhere where the climate allows you to ignore energy prices. Southern Spain?

    • catweazle666 permalink
      November 24, 2022 4:01 pm

      I’ve already joined the Reform Party.

    • Adam Gallon permalink
      November 24, 2022 5:03 pm

      Well, there used to be Southern Europe, but losing freedom of movement shut that off.

    • T Walker permalink
      November 24, 2022 5:25 pm

      It’s worse than we thought. Perhaps.

      https://dailysceptic.org/2022/11/23/is-degrowth-now-government-policy/

      There does seem to be a pattern here. We think they don’t know what they are doing. Many are coming to the conclusion that they do and it is deliberate.

      • catweazle666 permalink
        November 24, 2022 6:19 pm

        “Many are coming to the conclusion that they do and it is deliberate.”

        Of course it is!
        They make no secret of the fact, very much the opposite in fact.

  2. Jules permalink
    November 24, 2022 12:33 pm

    Push petrol and diesel tax too far and you get a strike by vehicle drivers as you did in 2000. Maybe the government has too short a memory of what that involved. The public mood for strikes has been re-kindled.

    • November 24, 2022 6:30 pm

      In 2000 the price of unleaded was 80p.

  3. Patsy Lacey permalink
    November 24, 2022 12:42 pm

    I find it extraordinary that the government is to spend an estimated £25 million telling the electorate how to economize on energy because of Putin’s war. They may be able to con some people but the majority of the population must surely realise that it is the result of many years of deliberate trashing of our energy security by parliament.

    • Vernon E permalink
      November 24, 2022 2:07 pm

      I even heard on one of the TV reviews on this subject that one of the recommendations will be to turn the heating off. This in the days when we don’t even have open fires to warm us. Its insane. And the Telegraph Business even headlines a suggestion by Hunt that “helping Ukraine” is a reason to economise. What utter duplicity. He well knows that we will have blackouts if it gets colder and those will be another nail in the coffin of this dying government.

      • mikewaite permalink
        November 24, 2022 3:23 pm

        “helping Ukraine” . seems to be going well , for some Ukrainians :
        https://swentr.site/russia/566935-they-robbed-ukraine/
        —“Bye, bye Kiev, hello Cote D’Azur: As Westerners send aid, here’s how Ukraine’s corrupt elites are profiting from the conflict”—

      • catweazle666 permalink
        November 24, 2022 4:05 pm

        “…this dying government.”

        It’s already dead and has started to stink.
        Sunak and his fellow Globalist billionaires are so insulated from reality they just haven’t noticed yet.

    • Harry Passfield permalink
      November 24, 2022 3:11 pm

      Pasty, spending (our) money on media advertising is the new scam, IMHO. I notice in my listening to commercial radio stations the sheer number of government-placed that are constantly aired. From the ridiculous smart meter ads with the god-awful, culture-appropriating Einstein, to any and all ads for the NHS. Someone in government, Civil Service or MPs us making hay while the sun don’t shine. And now tgey want to insult our intelligence by advising us how to suck eggs and save money on energy.

  4. drkenpollock permalink
    November 24, 2022 12:57 pm

    I am not sure any politician really understands our varying climate. Why are we impoverishing ourselves in the face of some mythical impending catastrophe? If it is true, why don’t the Chinese and Indians believe it? We have 3 coal mines; India has 285 and China 1110! If they don’t copy us, why are we planning on penury? Oh, and if you can make “blue ” hydrogen acceptable by carbon capture and storage, why not do the same for coal? Same dangerous emissions, plenty of energy in coal – so why not use CCS????

    • November 24, 2022 1:39 pm

      If politicians could understand anything at all they would not be the cheating, lying socialists that we “elected” ?

      • Crowcatcher permalink
        November 25, 2022 6:28 am

        wheewiz,
        I didn’t elect them as I refused to vote for any candidate who mentioned “climate change”, “global warming” or “net zero” therefore ended commenting as such on the ballot paper – “I refuse to vote for” climate change” numpties”

    • Harry Passfield permalink
      November 24, 2022 3:01 pm

      It has now been determined that instead of Indo-Chinese being part of the BAME population they are now to be part of the Global Majority. That being the case, perhaps we should be following the majority and getting our coal-fired power stations back on line (if we gave any left).

  5. Harry Passfield permalink
    November 24, 2022 3:52 pm

    Talking about tax-payers’ money being sprayed around, and I’m sure I wasn’t dreaming, but on R4 yesterday I heard them interview some chances who claimed he was working on putting a huge solar farm in space, converting the 24×7 energy generated to RF and transmitting it to Earth! He reckoned on it being the Holy Grail of power supplies. He just needed Government backing.

    • catweazle666 permalink
      November 24, 2022 10:03 pm

      That would make a nice death ray, you could devastate whole cities with total impunity.

  6. Realist permalink
    November 25, 2022 11:29 am

    It is still a disgraceful extortionate level of tax on an essential item that doesn’t even get used for maintaining the roads, let alone building the still missing ones. And just look at what it is doing to the prices of _everything_ else.

    >>Fuel duty has been frozen in the U.K. since January 2011.

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