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Select committee: Treasury Committee

Eleventh report - Fuel Duty: Fiscal forecast fiction

HC 783 Published 23 January 2023

Treasury Committee The work of the Treasury Report on parliament.uk ↗

At a glance1 recommendation · Government response published 22 March 2023 (deadline 23 March 2023)

The government's response

Summary written by Accountability Index from the government's response. It is not the government's own words.

The Government responds to the Committee's report on fuel duty forecasts by saying that the OBR's central forecast published that day "reflects the Government's policy position on fuel duty" and that it will keep long-term fuel duty rates under review.

  • The Chancellor announced that fuel duty rates will be maintained at current levels "for the next 12 months" by extending the temporary 5p cut and cancelling the planned inflation increase for 2023-24.
  • The Government states that it takes protecting the credibility and reputation of the independent OBR and its forecasts "seriously", and that the Treasury provides it with "all relevant information".
  • In response to the report, the OBR have included a memo line on the impact if fuel duty were to remain constant in cash terms, which the Government says provides transparency on the fiscal implications if it decided not to uprate fuel duty in future.
  • The Government will "continue to keep fuel duty rates in the long term under review", including "carefully considering support for motorists, fiscal implications and use of fuels".

Read the government's response ↗ Report an error

Sources

Recommendations and conclusions 1

  1. 9
    We recommend that the Treasury, for the purposes of providing the OBR with a policy... Recommendation · addressed to HM Treasury Recommendation (the committee's words)
    We recommend that the Treasury, for the purposes of providing the OBR with a policy assumption for future forecasts, should assume there will be no inflation-linked rise in fuel duty over the forecast horizon. This would more accurately reflect the recent path of fuel duty and make for a more credible forecast. As ever, the Chancellor would be free to propose changes in duty rates at fiscal events. 12 HM Treasury, Spring Statement 2022, para 2.13, p24. The temporary reduction was given statutory effect by the Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) Order 2022. 13 Office for Budget Responsibility, Economic and Fiscal Outlook, November 2022, p52 14 Office for Budget Responsibility, Economic and Fiscal Outlook, November 2022, pp52–53 15 Institute for Fiscal Studies, Spring Statement 2022: Paul Johnson’s opening remarks, 24 March 2022 16 Qq173-174 Fuel Duty: Fiscal forecast fiction 5 Formal minutes Monday 16 January 2023 Members present: Harriett Baldwin, in the Chair Rushanara Ali John Baron Dame Angela Eagle Emma Hardy Danny Kruger Alison Thewliss Draft Report (Fuel Duty: Fiscal forecast fiction) proposed by the Chair, brought up and read. Ordered, That the Report be read a second time, paragraph by paragraph. Paragraphs 1 to 9 read and agreed to. Resolved, That the Report be the Eleventh Report of the Committee to the House. Ordered, That the Chair make the Report to the House. Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134. Adjourned till Tuesday 24 January at 9.30 am. 6 Fuel Duty: Fiscal forecast fiction Witnesses The following witnesses gave evidence. Transcripts can be viewed on the inquiry publications page of the Committee’s website. Wednesday 01 December 2021 Sir Tom Scholar, Permanent Secretary, HM Treasury; Charles Roxburgh, Second Permanent Secretary, HM Treasury; Cat Little, Director General, Public Spending, HM Treasury; Anna Caffyn, Finance Director, HM Tre