Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimate his Department has made of fuel duty tax revenues in (a) 2020, (b) 2030 and (c) 2040.

The independent Office for Budget Responsibility (OBR) forecasts fuel duty receipts for the next five years; The 2020-21 forecast is £29.6 billion. This forecast assumes that fuel duty is uprated in line with the Retail Price Index.

However, since 2011, fuel duty has been frozen – a cut in real terms. The announced freezes to fuel duty have meant the Exchequer has not collected around £46 billion in revenues through to 2018-19, and a further £38 billion of revenues will be foregone over the forecast period as a result of these previously announced freezes. For the purposes of comparison, £46bn is around twice as much as we spend on all NHS nurses and doctors each year.

Although longer term forecasts are not published, the OBR’s Fiscal Risks Report highlights that, in the long-term, revenues from fuel duty will decline as vehicles switch from liquid fuels to electric power and become more efficient. The government recognises that these changes may impact tax revenues, but it believes fuel duty will continue to have an important role in the tax system.