Rishi Sunak has announced fuel duty will be cut by 5p per litre. It is the first time in 20 years the cost has been cut.
In his Spring Statement in the Commons, the Chancellor told MPs it is the biggest cut ever and will be in place until March 2023. He said that will be worth over £5bn to families and businesses. It will take effect from 6pm tonight.
The Chancellor also announced two further measures to help with the cost of living crisis. Mr Sunak told the Commons: "As energy costs rise we know that energy efficiency will make a big difference to bills. But if home owners want to install energy saving materials, at the moment only some items qualify for a 5% VAT Relief and there are complex rules about who is eligible."
He said that because the UK is no longer bound by EU law people who have solar panels, heat pumps or solar installed will pay 0% VAT and wind and water turbines will have no VAT charged either.
"We will abolish all the red tape enforced on us by the EU".
The Household Support Fund - which is a fund of money being distributed by councils in England to the most vulnerable will be doubled to a total of £1bn. Councils will be "best placed" to help people in their local areas and will receive the money from April. It is not yet clear if Wales will receive a Barnett consequential for this change. Confused about what the Barnett Formula is?
Howard Cox, Founder of the FairFuelUK Campaign said in response to the fuel duty cut: "It would be churlish not to be thankful to the Chancellor in cutting Fuel Duty by 5p for 12 months. Well done Rishi! Our relentless campaigning has been fruitful. It will give some respite to millions of motorists, that have had and continue to have no choice but to drive.
"Just as important this fiscal relief to hauliers and small businesses teetering on survival, desperately need this reduction more than most road users, it’s way overdue. It will only benefit drivers and the economy if the new fuel taxation level becomes permanent and is accompanied by the introduction of an independent pump pricing watchdog, we’ve notionally called PumpWatch. Today’s fuel duty reduction must be passed onto drivers immediately."
