Treasury sources said Rishi Sunak rejected an increase in the fuel tax after they concluded that reliance on cars as a transport security measure during the pandemic was still too great.
The Chancellor appears to be seriously considering an increase ahead of his previous budget last March, willing to send a signal about the UK government’s green agenda.
The Treasury also assessed an increase of up to 5 points per liter from March 2021 on the assumption that the UK will return somewhere close to normal transport use.
“More and more people are still using cars as the safer mode of transport,” said a Treasury source. “And now electric vehicles have an enormous cost – it sounds like priority consideration.”
The Chancellor may also extend the company’s initiative where electric car drivers did not pay in-kind profits tax until April 2021.
The decision not to raise the fuel tax means that tabloids were frozen at 58p per liter for 10 years after a major campaign that was predicted to cost the Treasury. More than £ 50 billion in lost revenue.
However, as more drivers switch to electric cars, an increase is inevitable in the coming years, which could lead to a drastic drop in Treasury revenues if it does not raise the tax.
In a letter to the Altar from lawmakers organized by the Fair Fuel campaign, Wednesday urged the chancellor not to raise the fuel tax, and even consider a cut.
“Any potential increase will affect disproportionately low wages and workers outside of London,” said the letter of 26 lawmakers, pointing to the prime minister’s commitment not to raise the tax in 2019.
The budget on March 3 is expected to extend Covid support packages at least until the end of June. Boris Johnson’s roadmap to lift restrictions predicts that all limits on social interaction will be removed by June 21.
This will include the extension of the permit plan, which is expected to cost £ 4 billion per month, the business rate vacation for the retail, hospitality and leisure sectors, and a VAT reduction for hospitality and tourism. The Times reported on Wednesday that the stamp duty holiday will also be extended.