Alcohol and fuel duties frozen for a year, while air passenger duty and car tax increase

Charles Hymas
·3 min read

Motorists and drinkers received a boost in the Budget as fuel and alcohol duties were frozen, but long-haul air passengers face hikes in duties and road tax will still increase by the rate of inflation.

Rishi Sunak, the Chancellor, announced planned rises in the duty on beer, cider, wine and spirits will be frozen for a second year running.

The amount of tax on a tankful of petrol and diesel will also remain the same for the tenth year in a row.

The Treasury estimated the cumulative saving for the average car driver was £1,600, when compared to the pre-2010 escalator.

Addressing the Commons, Mr Sunak said: ''All alcohol duties frozen for the second year in a row, for only the third time in two decades.

“And right now, to keep the cost of living low, I'm not prepared to increase the cost of a tank of fuel. So the planned increase in fuel duty is also cancelled."

The moves came after a year in which many pubs and restaurants have been forced to remain shuttered and the majority of Britons have been working from home.

However, the Treasury signalled this could be the last year the fuel duty remains frozen.

“Future fuel duty rates will be considered in the context of the UK’s commitment to reach net-zero emissions by 2050,” warned the Budget red book.

It said it would also uprate (increase the value of) vehicle excise duty (VED) rates for cars, vans and motorcycles in line with inflation from Apr 1, 2021. Heavy goods vehicles will however escape the increase as part of a bid to boost the haulage industry.

Air passenger duty will remain frozen for short-haul routes in a bid to help the European summer holiday market but long-haul rates will increase in line with inflation.

This means an £2 increase on long-haul economy flights from the UK, and £5 for those travelling in premium economy, business and first class. Those travelling long-haul by private jets will see the rate increase by £13.

Craig Mackinlay, the Tory MP for South Thanet and chairman of the All-Party Parliamentary Group (APPG) for Fair Fuel, said: “The continued freeze on fuel duty is absolutely the right decision and one that will be welcomed by hard-pressed motorists and hauliers up and down the country.

“The electorate resoundingly rejects the green lobby's unpopular policies at repeated elections. The Chancellor is quite right to dismiss their call for an increase in fuel duty too."

Howard Cox, the founder of FairFuelUK, said: “It would be churlish, not to thank the Chancellor and the Prime Minister for maintaining the freeze in Fuel Duty for a tenth successive year.”

But Karen Dee, chief executive of the airport operators' association, said: “While the extensions of the Job Retention Scheme and airport business rates relief are very welcome, they are not nearly enough given the scale of Covid-19’s impact.

"Combined with the long‑haul APD increase, which is a very damaging blow to an industry already on its knees, this is not a Budget for a global Britain."