Healey is urged by Labour’s favourite think tank to hit motorists at the pumps
The Resolution Foundation has urged Chancellor John Healey to end the Fuel Duty freeze and raise the tax gradually, despite calls for relief as fuel prices soar. It argues the freeze is poorly targeted and that higher-income households benefit most, while saying fuel-tax cuts weaken public revenues and incentives to move away from fossil fuels.
Diesel has topped £2 a litre and petrol costs about £1.75 at many forecourts amid Middle East supply disruption. Current plans would raise duty by 3p a litre in January, another 2p in March and 1p in April as the freeze ends; the Foundation says a 13 per cent increase by April is unrealistic and proposes quarterly rises from 53p now to 58p in 2028 and 66p in five years. Critics say higher fuel taxes would also raise costs for households and businesses reliant on road transport.
- Resolution Foundation calls for gradual Fuel Duty rises.
- Diesel has topped £2 a litre amid supply disruption.
- Critics warn higher duty could raise costs across the economy.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Ending the freeze gradually could help restore public revenue and avoid locking in a broad tax relief that benefits higher-income households most. Regular, measured increases would give motorists and businesses time to adjust, while keeping the price signal to reduce fossil-fuel use in place.
The case against
Raising duty while fuel prices are already high would add to pressure on households and businesses that depend on driving, including people with limited transport alternatives. A freeze or slower increases could offer timely relief and help contain the knock-on costs of moving goods and providing services during a supply disruption.