A rise in fuel duty has been ruled out by the chancellor, Rishi Sunak, ahead of his Budget speech.

According to treasury sources speaking to The Guardian, he’s concluded that reliance on cars as a transport safety measure during the pandemic is still too great.

The chancellor seriously considered an increase before his previous budget last March, keen to send a signal about the UK government’s green agenda.

Changing the future

The Treasury also considered a rise of up to 5p a litre from March 2021. It had assumed that the UK would be back to somewhere near normal transport use by now. With the post Christmas lockdown and ongoing worries about using crowded public transport for the foreseeable future, the decision has been shelved.

“More people are still using cars as safer mode of transport,” a Treasury source said. “And there is a massive cost to electric vehicles at the moment – that feels like the priority to address.”

Fuel duty has now been frozen for 10 years at 58p a litre. This is thought to have cost the Treasury more than £50bn in lost revenue.

A rise in future years is seen as inevitable. However, with the switch to electric cars speeding up, the treasury is set to lose even more income. This has given rise to the prospect of a reformed road tax system based on mileage and vehicle use.

Tomorrows news

The budget on 3 March is expected to extend Covid support packages until at least the end of June. Boris Johnson’s roadmap for lifting restrictions anticipates that all limits on social interaction will be lifted by 21 June.

That will include extending the furlough scheme, expected to cost up to £4bn a month, the business rates holiday for the retail, hospitality and leisure sectors and the VAT cut for hospitality and tourism. The Times reported on Wednesday that the stamp duty holiday would also be extended.