Rishi Sunak told 5p fuel duty cut ‘will benefit gas-guzzling SUV owners most’

Dismay as chancellor snubs calls for windfall tax on oil and gas giants

Campaigners have criticised Rishi Sunak for rejecting a windfall tax on oil and gas giants and instead announcing a “misguided” 5p fuel duty cut, which one campaigner says will most benefit the owners of “gas-guzzling SUVs”.

The chancellor announced on Wednesday “the biggest cut to fuel duty rates ever” as part of measures in his spring statement to help people with the cost of living as inflation hits a 30-year high.

But environmental campaigners said the policy, due to be in place for a year, was ineffective and unfair and said a windfall tax could have helped hard-hit families far more.

Critics noted many of those on the lowest incomes did not own a car and warned the spring statement did nothing to help with the cost of public transport while it also risked putting off drivers from buying electric vehicles.

“A fuel duty cut gives more money back to the driver of an expensive gas-guzzling SUV than the average punter,” said Doug Parr, policy director at Greenpeace UK.

The chancellor should only cut fuel duty if he can make an equivalent cut to the costs of public transport which offers real support for those facing a cost of living crisis, he added.

“There’s nothing in the chancellor’s statement that will make public transport cheaper or easier for people,” said Helena Bennett, senior policy adviser at Green Alliance, an environment think tank. “If fuel duty stays low when oil prices fall, it will also make it less attractive for drivers to move to electric vehicles, which we know are cheaper to run over the course of their lifetime.”

The fuel duty cut came into effect at 6pm Wednesday and will last until March next year. Motorists have been hit by soaring fuel prices in the wake of Russia’s invasion of Ukraine which increased the cost of oil. During his mini-Budget, Mr Sunak said UK sanctions on the Russian government were not “cost-free for us at home” and that Russia’s invasion of Ukraine presented a “risk” to Britain’s recovery.

“Today, I can announce that for only the second time in 20 years, fuel duty will be cut,” he told MPs. “Not by one, not even by two, but by 5p per litre. The biggest cut to all fuel duty rates – ever.”

The government has legislated to reach net zero planet-heating greenhouse gas emissions by mid-century and has said the UK will end the sale of new petrol and diesel cars and vans by 2030.

Tom Fyans, director of campaigns and policy at CPRE, the countryside charity, said it would have been better for the government to have helped people in a way that enhances the UK’s ability to tackle the climate crisis.

He added instead of cutting fuel duty, the government should have funded bus networks ensuring villages had a regular service.

“Motorists seemingly being the chancellor’s top priority is misguided when we’re in the midst of a climate emergency,” he said.

Greg Archer, UK director of the think tank Transport and Environment, said wealthy drivers “will be rubbing their hands in glee” at saving money each time they fill up while the poorest in society, who cannot afford a car, will wonder why their bus and train fares continue to rise.

“Cutting fuel duty is a populist, untargeted policy that does almost nothing to address the cost of living crisis,” he added. “In contrast, the ignored windfall tax on energy companies could have recycle[d] billions back onto the pockets of hard off families struggling with their energy bills.”

Tessa Khan, director of Uplift an organisation that campaigns for a just and fossil-fuel free UK, also called on the government to ask oil and gas companies to help finance relief for struggling households.

“Oil and gas companies, who are swimming in profits, have not been asked to put their hand in their pocket to help,” she said.

Jack Richardson, the climate spokesman for the Conservative Environment Network, said a fuel duty cut would “soften the blow” of rocketing oil prices in the short term, helping motorists and cutting the cost of transporting goods across the country.

But, he said, the crisis underlines the need to “urgently” review the UK’s road taxes.

HM Treasury declined to comment.