Thank you for contacting me about fuel prices.
I welcome the fact that the decision to freeze fuel duty for ten consecutive years has saved the average driver over £1,000.
Cars are essential to many people here in the constituency and I have conveyed your comments on fuel duty to my colleagues at the Treasury. They assure me that all elements of taxation, including the various reliefs associated with any given tax, are kept under constant review. Any changes to fuel duty would be considered as part of the normal process leading up to the Budget. I shall be listening carefully on Wednesday to what the Chancellor has to say about motorists.
For the first time since 1926, money raised through car tax (Vehicle Excise Duty) is now being spent directly on the roads. Around £28bn is being invested in England's strategic and local roads, an amount equivalent to all VED receipts. I was also very pleased to see the announcement in the recent Spending Review that £1.7 billion has been made available for local highway authorities in England (outside London) for 2021-2022 to improve the condition of local roads and associated infrastructure. A new £2.5 billion Pothole Fund is running between 2020/21 and 2024/25 to help local authorities fill-in around 50 million potholes across the country and stop potholes forming in the first place.
It is worth noting that the fuel duty freeze comes at significant costs to the Exchequer, and that £67bn has been spent on freezing fuel duty and another £46bn will be spent by the end of 2025.
My colleagues at the Treasury have emphasised that any future fuel duty rates will be considered alongside measures that are needed to help meet the UK’s net zero commitment.
The Government has set itself a legally binding target for the UK to reach net-zero greenhouse gas emissions by 2050. While it is important to encourage active travel and greater use of public transport to help drive down emissions and improve air quality, the reality is that for many commuters and businesses it is simply not possible to forgo using a vehicle in all situations. The Government's view is that we need to recognise that the transition to electric and alternatively-fuelled vehicles will play a crucial role in helping us reach net zero carbon emissions, so it is important that our local, major and strategic roads are fit for purpose, both now and in the future.
I welcome the Government's decision to invest £350 million in green fuels for heavy industry. This includes a particular focus on aviation delivered through the establishment of Jet Zero Council to steer the UK's efforts to make net-zero long-haul flying a reality. The potential impacts of Direct Air Capture (DAC) and the possibilities of CO2 neutral fuels are being examined and I know my ministerial colleagues are committed to ensuring our future tax regime encourages innovation and contributes to Britain’s net zero ambitions.
While I am aware of the arguments in favour of introducing an independent pump pricing watchdog, I do not believe such a move is necessary. I firmly believe that the most effective way to keep fuel prices down is through an open and competitive market. In 2013, the Office for Fair Trading investigated competition in the UK fuel sector and concluded that it was operating well. It should be highlighted that the Government works with numerous stakeholders to ensure that the fuel industry is competitive, so consumers benefit from low prices.
Thank you again for taking the time to contact me.
Craig Whittaker MP