Harriett Baldwin welcomes the extension of the 5p cut in fuel duty and the freezing of the escalator, but raises concerns that the Office for Budget Responsibility continues to use the assumption that fuel duty will rise with inflation in its fiscal forecasts which undermines their credibility in reporting the health of the nation’s finances.
Harriett Baldwin (West Worcestershire) (Con)
There was a significant tax cut in the Budget that has been greatly welcomed by drivers in my constituency and elsewhere, namely the extension of the 5p cut in fuel duty and the freezing of the escalator, but does the Chancellor accept that by postponing that decision until an election year—next year—he is simply continuing the fuel duty fiction that our Committee has highlighted?
The Chancellor of the Exchequer (Jeremy Hunt)
I am delighted that my hon. Friend welcomed the freezing of fuel duty, which means that over the period for which it has been frozen, the average motorist will have saved £200. There is a specific reason why I wanted to continue to freeze it this year: combined with the extension of the energy price guarantee, it will reduce CPI inflation by 0.7% in a year in which headline inflation is still over 10%.