Government to lift duty freeze on fuel and alcohol to help fund NHS

The government is considering lifting freezes on fuel and alcohol duties in order to cover the boost in NHS funding that it had recently promised.

According to The Guardian, senior government sources said fuel duty could raise £800m a year to help cover the recently announced NHS budget boost of £20bn by 2023.

Fuel taxes had been frozen for eight years.

Alcohol duty was only frozen last year but could also bring in more than £200m of additional funding a year.

The same sources said the proposals, which Philip Hammond has been mulling since becoming Chancellor in 2016, were "under serious consideration".

Hammond had said that the funding boost for the NHS would come from taxes and the money clawed back from Brussels after the divorce with the European Union, the so-called "Brexit dividend".

Yet some MP’s have complained that the plan could raise the cost of living.

Furthermore, anti-Brexit campaigners were warning that there would be "no Brexit dividend" since the UK would still have to pay money to the EU for the following years.

Howard Cox, founder of FairFuel UK, said the plan was "suicidal" for the government: "We have the highest fuel duty in the world despite eight years of a freeze."

"Any emotive fuel tax hike to fund the NHS will be suicidal for the government when they know and stated in 2014 that cutting it will generate more taxes to the exchequer,” he added.

Tory former minister Robert Halfon said plans to lift the freezes would go down "like a bucket of cold water", as hard-working families and businesses were likely to be hit hardest.

He told The Independent on Tuesday: "I was horrified to see the story, if it is true, as it would have a huge impact on not just motorists but businesses too.

"The price of fuel has gone up hugely already. I think 15p for diesel and 13p for for petrol. I think it would be entirely the wrong thing to be putting up fuel duty.

"People think it if you have a car then you are wealthy, but that is not the case. This will hit people in rural areas without good transport links."