More than 30 MPs from across the political spectrum have joined forces with campaigners to urge the chancellor to reject a “duplicitous” rise in fuel duty after two government ministers failed to rule out the move.
In an open letter to George Osborne before tomorrow’s emergency budget, they warn an inflation-based rise would lower GDP and cost the UK £8billion in reduced economic activity.
Among the signatories are former Scottish Secretary Alistair Carmichael, Angus MacNeil, the new chairman of the Commons energy committee, and West Aberdeenshire and Kincardine MP Stuart Donaldson.
Campaign group FairFuelUK has also published figures from the Centre for Economics and Business Research which estimates the cost to Scotland of increasing fuel duty by inflation over the next five years at £654.5million.
According to the research, the cost to Aberdeen City would be £19.2million, Aberdeenshire £39.4million, Western Isles £2.8million, Highland £37.9million, Moray £10.6million, Orkney £1.9million and Shetland £2.7million.
The letter says: “Even the Treasury has said that the Government’s freeze on duty since 2011 has improved GDP by 0.5% and that ‘low fuel costs are good for the economy’.
“To ignore 37 million drivers, deny the fact we are reliant on a road economy and side-step haversacks of prestigious academic fiscal research will seem arrogant and reckless.
“Before the election this Government trumpeted its policy of keeping fuel costs low to stimulate growth and jobs. A volte-face now will appear duplicitous.
“We urge the chancellor to be fearless and continue to protect the UK’s fragile road-based economy by at least freezing fuel duty in the lifetime of this parliament.
“However he must consider a real cut in this levy, the economist’s preferred choice.”
The Tories froze fuel duty for the whole of the last parliament while in coalition with the Liberal Democrats.
However, the Chancellor’s room for manoeuvre on the issue has been restricted by Conservative election promises not to increase income tax, VAT or national insurance.
When asked to rule out rises at the petrol pump last month, Exchequer Secretary Damian Hinds insisted “all taxes are kept under review”.
Scottish Secretary David Mundell has also refused to rule out an increase, insisting Mr Osborne had “made no clear statement” about his plans.