The Conservative Party forced a vote on Wednesday to axe the government's planned fuel duty increase, but the bid was defeated in the Commons. The Conservative motion was defeated 103 votes to 259, resulting in a majority of 156. Fuel duty has been frozen since 2011, a policy maintained by the Conservatives during their 13 years in power.
In response to Russia's full-scale invasion of Ukraine in 2022, the duty was temporarily cut by 5p per litre. Chancellor Rachel Reeves has said this 5p cut will be gradually unwound starting in September, with current plans indicating a rise of 1 pence per litre that month. Labour MPs voted before Easter to implement the government's increases in fuel duty in September, and the government has brought forward legislation to enact the rise.
Yes, the student loan system is broken, but added that it was more broken that one in six young people are not in education, employment or training. So, yes, we want to fix it. Yes, we want to make improvements. But is it front of the queue? No, it's not.
Treasury minister Torsten Bell said the government's fuel duty changes will save the average motorist over £90. Beyond fuel duty, the Conservative Party is also advocating for changes to student loans, including stopping 'real interest' and lifting the salary repayment threshold. Chancellor Rachel Reeves admitted the student loan system is 'broken' but indicated it is not a priority for immediate fixes, stating it is not 'front of the queue' for reforms.
Oil and gas prices have been driven up as Iran has throttled key shipping routes through the Strait of Hormuz. The conflict in the Middle East is having a huge impact on fuel prices in the UK. Prime minister Sir Keir Starmer and Chancellor Rachel Reeves have stressed that tax policies are always kept under review.
Fuel costs matter enormously to people right across the country, and insisted they have already taken action to ensure that fuel remains affordable. In November's budget, we extended the temporary 5p per litre cut to fuel duty for a further five months. Additionally, we cancelled the inflation-linked increase plan for 26/27. Our fuel duty changes will save the average motorist over £90. This Government will take the necessary decisions to help protect both household finances and public finances.
The defeat of the Conservative motion leaves the planned fuel duty increase on track, but several unknowns persist. It is not confirmed what specific measures, if any, the government is considering to mitigate the impact of rising oil prices on consumers beyond the fuel duty policy. The revenue projections from the increase and their intended use have not been publicly detailed.
Regarding student loans, the government's admission that the system is broken does not guarantee imminent reforms, as Chancellor Reeves has placed it lower on the priority list. In the context of fuel duty, the long-term strategy for managing this tax amid global volatility is unclear. The specific impacts on rural economies and low-income households have not been thoroughly assessed.
The government has not outlined additional measures to cushion consumers from rising oil prices.