New car tax changes could ‘be bad for economy’ and impact ‘poorest drivers’
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Chancellor Rishi Sunak is reportedly considering a 5p per litre hike on fuel duty changes in the UK.
It was previously warned the tax increases could impact "low-income families" in the country.
If Mr Sunak goes ahead with raising the costs, it will be the first time fuel duty is increased in almost a decade.
It is believed it could increase in the Chancellor's next Budget.
But Conservative MP Craig Mackinlay warns any rise in petrol tax would be "bad for the economy".
He fears the poorest drivers would end up spending more on fuel than wealthier groups in the country.
The MP said: "Fuel duty rises are not supported by the public because they are bad for the economy, bad for business and bad for jobs.
"Motorists in the poorest 10% of the UK population already spend proportionately twice as much of their disposable income on fuel as wealthier groups so increasing fuel duty will have a disproportionate tax impact.
"The Chancellor must reject the green lobby's calls and continue the successful and popular freeze on fuel duty."
Since 2011, fuel duty has remained at 57.95p with successive freezes costing the Treasury over £100billion.
Sir Robert Chote, the Former Chairman of the Office for Budget Responsibility, said there was now a strong case to end the charge.
He also warned the Treasury needed to "bite the bullet" as part of a reevaluation of public finances.
But a report from the CEBR and FairFuel said any rise in fuel duty would generate a little revenue.
They also claimed money generated from fuel duty would be less than a fifth of current levels by 2040 as more switch to electric cars.
Martin Lewis warns 1.8m Brits face penalty fine for missing HMRC tax deadline
Both CEBR and FairFuel predicted a 2p rise could generate between £250 to £470million in the short term, but would drop to just £50 to £90million within 20 years.
MP Robert Halfon warned a fuel duty increase would "damage the foundations of recovery".
He added: "Levelling up must mean cutting the cost of living for working people.
"At a time when those on lower incomes are struggling financially, a fuel duty increase would level down – far from building back better it would damage the foundations of economic recovery."
Meanwhile, new driving laws have come into effect in 2021 and it could impact millions of motorists.
On Sunday, MOT extensions came to an end so any driver caught without a valid certificate could face consequences.
Also the last-minute agreement between the UK and the EU means Brits will not need an International Driving Permit.
However, when driving aboard certain documents are needed and motorists are required to have a car insurance green card in place.
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