Sunak under pressure from Tory and opposition MPs to deal with cost of living

The Chancellor will deliver the Spring Statement on March 23.

Richard Wheeler
Tuesday 15 March 2022 14:04
Chancellor Rishi Sunak (Justin Tallis/PA)
Chancellor Rishi Sunak (Justin Tallis/PA)

Rishi Sunak has faced fresh pressure from Tory MPs to combat “eye-watering” fuel costs.

The Chancellor was urged by colleagues to cut fuel duty, increase mileage rates from 45p to 60p and give a 15% cut to “vital fuel users”, such as haulage firms.

Mr Sunak stopped short of offering any commitments ahead of the Spring Statement on March 23, but offered to “bear in mind” the suggestions.

On wider cost of living concerns, shadow chancellor Rachel Reeves branded Mr Sunak “totally out of touch” before telling MPs: “He doesn’t seem to understand how the cost of living crisis is affecting the least well-off in society.”

Opening Treasury questions, Mr Sunak said the Government “recognises that inflation is rising and is closely monitoring the situation” together with the Bank of England.

Shadow chancellor Rachel Reeves (Ian West/PA)

Conservative Jake Berry (Rossendale and Darwen) said: “With the cost of fuel now being an eye-watering £2 a litre in some areas, it’s led to a huge VAT windfall (from) the Treasury.

“When the Chancellor thinks about his Spring Statement coming up, will he not only look at cutting fuel duty, but also look at mileage recovery rates?

“They have been at 45p per mile for over a decade, now is the time to put them up to 60 at least.”

Mr Sunak replied: “I’m grateful to (him) for his suggestions, of course I’ll bear them in mind.

“He’s right about the rising cost of fuel at the pumps, although I am pleased to see that over the last few days the price of Brent has fallen by about 25%, just illustrating the volatility of the situation (we’re) currently experiencing.”

Conservative Fay Jones (Brecon and Radnorshire) said the cost of living “is biting hard” in her constituency, adding: “Heating oil is eye-wateringly expensive and extremely hard to come by… It is wrong to assume that those who live in rural areas are wealthy enough to withstand these pressures.”

Conservative MP Giles Watling (Clacton) added: “With the cost of fuel reaching record levels, we face a cost of living rise across the board; everything we consume has to be delivered and Clacton can be a long way (to go).

“France is offering rebates, Germany a fixed-price reduction, has (Mr Sunak) considered special reductions – say 15% – for vital fuel users, such as haulage companies?”

Mr Sunak said he recognised the importance of fuel costs, adding: “That’s why I’m proud we delivered the 11th-in-a-row freeze in fuel duty, which has delivered huge savings to households and businesses over the past several years.”

As Labour pressed for a “windfall tax” on the profits of oil and gas firms to assist working families, Mr Sunak defended the support being offered by the Government.

This includes giving all 28 million households in Britain a £200 up-front rebate on their energy bills from October. This will be recouped by hiking bills by £40 per year over five years from 2023.

Mr Sunak has also promised a £150 council tax rebate for homes in bands A to D.

The SNP called for an “emergency package of support” for households and businesses in the Spring Statement.

Conservative MP Nigel Mills (Amber Valley) questioned if next month’s increase in Universal Credit will be enough to help people next winter.

He added: “And if she recognises that there is a problem, will the Government look at bringing forward next April’s increase to this autumn to give people a bit more money to get through the heating bills and food bills for next winter?”

Treasury minister Lucy Frazer said: “There has been a range of measures to help support families, those working and those not working, and the price of energy is now set until the autumn, and there is a significant amount of money going in now and again in the autumn.”

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