Chancellor accused of ‘peddling fiction’ that fuel duty should rise every year

THE Chancellor has been slammed for peddling “fiction” that fuel duty should rise every year.

By refusing to permanently abolish the fuel duty escalator policy to hike the levy by inflation each April, MPs say Budget forecasts prepared by the OBR are wrong.

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Jeremy Hunt is under massive pressure to keep a 5p cut to fuel duty that will expire automatically in March unless he steps in at the Budget.

The levy is also due to rise by inflation every new financial year – but MPs say he must freeze it instead.

Thanks to The Sun’s Keep it Down campaign, every Chancellor since 2011 has frozen or cut fuel duty, with the Treasury Select Committee now calling for more honesty that the escalator is all but dead.

They say the Treasury should stop promising to put up fuel duty and then U-turn and instead acknowledge it has been frozen for more than a decade as that would mean the OBR can forecast Government tax and spend plans correctly.

Their new report concludes: “We recommend that the Treasury, for the purposes of providing the OBR with a policy assumption for future forecasts, should assume there will be no inflation-linked rise in fuel duty over the forecast horizon.

“This would more accurately reflect the recent path of fuel duty and make for a more credible forecast.”

Committee boss Harriet Baldwin said: “After years of fiscal forecast fiction, it’s time for the Government to more accurately reflect the actual path of fuel duty.

“Doing so would enable the OBR to produce a more credible forecast.”