Chancellor weighing up fuel duty cut as PM seeks nuclear energy solution

Rishi Sunak is also said to be considering altering the national insurance threshold to prevent the lowest earners from paying his April levy.

21 March 2022

The Chancellor is reportedly gearing up to slash fuel duty in his spring statement as Boris Johnson pursues long-term measures to guard against future energy bill pressures.

Rishi Sunak appeared on Sunday to hint at help for motorists in his so-called “mini-Budget”, with measures to prevent filling up cars from being “prohibitively expensive” expected to be unveiled on Wednesday.

There are suggestions the Chancellor could temporarily cut fuel duty by as much as 5p per litre to support families and businesses through the cost of living crisis.

Forecourt prices have risen sharply since Russia’s invasion of Ukraine, with average prices at a record 165.9p per litre for petrol and 177.3p per litre for diesel.

With pressure mounting on Mr Sunak to act, he told the BBC on Sunday that “of course” he was prepared to step-in to help those on tightly-squeezed budgets.

However, the No 11 incumbent added that he “can’t solve every problem” as he conceded Britons faced a “difficult” time amid ballooning inflation.

Shadow chancellor Rachel Reeves said Labour would vote for a fuel duty reduction but that, with 5p off amounting to a £2 saving on the average car tank, called for Mr Sunak to go further to deal with the financial demands facing the public.

There were also reports the Chancellor is considering raising the threshold at which people start paying national insurance.

The Times said the move would take an estimated 150,000 people out of paying next month’s planned 1.25 percentage point NI contribution rise.

April’s increase is designed to pay for clearing the NHS backlog caused by the pandemic as part of a health and social care levy.

It comes as the Prime Minister prepares to sit down with nuclear industry leaders on Monday to discuss how to get domestic projects off the ground “more quickly and cheaply”.

With Mr Johnson intent on weaning Britain off dependence on foreign oil and gas following Russia’s invasion of Ukraine, he told Conservative activists at his party’s spring conference that the Government was going to place some “big bets on nuclear power”.

The intention would be to back small modular reactors as well as larger projects, he told the Blackpool event on Saturday.

No 10 said attendees at the Downing Street roundtable are expected to discuss how Government and industry can work together to remove barriers to delivering more nuclear plants.

Dr Rowan Williams, former Archbishop of Canterbury, is one of more than 200 church leaders who has urged the Government not to support new oil and gas developments
Dr Rowan Williams, former Archbishop of Canterbury, is one of more than 200 church leaders who has urged the Government not to support new oil and gas developments (Daniel Leal-Olivas/PA)

Mr Johnson also told delegates in Blackpool that he planned to “make better use of our own naturally occurring hydrocarbons”.

But more than 50 Anglican and Catholic bishops, including former Archbishop of Canterbury Dr Rowan Williams, have written to the Prime Minister and the Chancellor urging them to rule out support for new oil and gas developments in the spring statement.

The letter, seen by PA news agency and backed by more than 200 Christian leaders, said: “New oil and gas production will not deliver lower energy bills for families facing fuel poverty and will have no impact on energy supply for years.”

They called for the Government to invest in renewable energy and to bring forward a “windfall tax” on oil and gas companies to help ease the impact of high energy bills.

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