Fuel Duty: Cost of Living

6. What assessment he has made of the potential impact of reducing fuel duty on the cost of living for working families.

22. What estimate he has made of the average annual cost to motorists of discontinuing the 5p fuel duty reduction from December 2026.

As part of the £600 million package the Government announced in May, there will be no rise in fuel duty this year. This means that the temporary 5p cut will be extended till the end of the year, providing certainty to motorists. In total, the decisions taken since the 2024 general election to freeze fuel duty save motorists 11p per litre, or £120 per year for the average car, compared with the plans inherited from the previous Government.

I appreciate what the Minister has said about the fuel duty freeze, but the Liberal Democrats have called for an emergency cut of 10p per litre, which would make a difference of 12 per litre at the pump for ordinary families. For my hard-pressed constituents in Edinburgh West this winter, that could make a big difference not only to their travel costs, but to the cost of food and other services. Will the Government consider that emergency cut in the forthcoming Budget?

I agree with the hon. Lady about the importance of providing breathing space for families, which is a priority for us as a Government, and she mentioned her plans. I have set out what we have done since the general election to reduce fuel prices by 11p per litre compared with what they would have been otherwise. As I set out in my earlier remarks, the 5p cut has been extended to the end of the year, and as she would expect, any future decisions will be taken at the Budget by the Chancellor.

I cannot believe the Minister just said he wanted to give families breathing space when the RAC Foundation has found that, since fuel prices increased due to international issues earlier this year, the Treasury has raked in £1 billion extra from the VAT on fuel. How can it possibly be fair on motorists or give them any breathing space whatsoever to carry on with another fuel duty hike in January?

The hon. Gentleman is right to point to the fact that international events have an impact on prices here at home. We did not want to get involved in that conflict, unlike the Conservative party. None the less, we are impacted by it, and the right thing for us to do as a Government is to make sure we are providing breathing space for families as we weather international events.

I welcome the Government’s commitment to the cut on fuel duty, although motorists are being not only squeezed at the pumps but ripped off by unfair monthly insurance charges. Does the Minister agree that insurance companies should not be charging unfair and unjustified additional costs for monthly insurance, when that is what most people can afford? Will he meet me to discuss the Which? research, which has found that people paying monthly for insurance are paying hundreds of pounds in additional costs?

Although my hon. Friend is right that fuel duty is one cost that families face, they also face a number of other costs, including through insurance. He is a formidable campaigner on a range of issues, so I would be happy to meet him to discuss this issue, or to ask my colleague, my right hon. and learned Friend the Member for Northampton North (Lucy Rigby), to do so, if she is better placed to respond.

I welcome the Government’s fuel duty freeze for working families, alongside the road tax holiday for hauliers and the diesel fuel duty cut. Fuel costs for businesses in my constituency, such as Northfield quarry near Dunipace, have nearly tripled due to the Iran war and the previous Government’s tightening of eligibility for red diesel. In the Budget, will the Chancellor consider extending fuel duty reductions for industries such as quarrying, which is essential for house construction and provides good local jobs for working families?

I thank my hon. Friend for his request of the Chancellor at the Budget. As the Chancellor set out earlier, he will take those decisions at the Budget in the normal way, but my hon. Friend has made a powerful case for his constituents and used this opportunity to ensure that all of us on the Treasury Front-Bench team have heard what he has to say.

I call the shadow Minister.

Fuel duty is catnip for a Chancellor desperate for revenue, but it is no sin tax, because for millions of Britons, vehicles are lifelines not luxuries. The imminent rise in fuel duty comes as tankers are ablaze in the strait of Hormuz. Must family budgets also go up in flames?

I think the hon. Gentleman’s point is that the price of fuel is linked to international events, which, as I said earlier, I very much agree with. That is why it is important that we de-escalate the situation in the strait of Hormuz, which is the best way to bring down the cost of fuel. Meanwhile, the Government are determined to give families across the country breathing space—extending the 5p cut until the end of the year, a £2 cap on bus fares, and removing VAT from electricity bills—as we weather the impact of international events.