A policy that benefited the richest and cost the UK £100bn: it’s long past time to end the fuel duty freeze

 Nothing speaks so eloquently of the rundown state of Britain than potholes on the roads. Motorists rightly complain of the damage caused to their vehicles. Cyclists risk serious injury every time they mount their bikes.

Increased road use from a rising population is one reason for the problem. Cuts to repair budgets are another. Fixing the problem will be expensive, with one estimate putting the cost of mending potholes in England and Wales at a hefty £17bn

Complaints about the state of the roads have made governments reluctant to arouse the ire of motoring lobby groups by raising fuel excise duty – the tax paid at the pump on fuel. The last chancellor to do so was Alistair Darling 15 years ago. The cumulative cost to the exchequer of the freezes and cuts to fuel duty since 2010 is put at £130bn – a colossal sum given the struggle governments have had to balance the books during that time.

In reality, the days are numbered for fuel duty. Of the 34m vehicles on the UK’s roads, 1.6m are fully electric, but that figure will rise steadily over time. Once petrol and diesel vehicles are phased out completely, the £24.4bn currently raised from fuel duty will dwindle to zero. That represents a sizeable and permanent hit to the public finances.

Rachel Reeves has more immediate things to worry about. The weakness of the economy means the chancellor is at grave risk of breaking her self-imposed rule that day-to-day government spending should be matched by tax receipts. Reeves fears that breaking the rule would incur the wrath of the financial markets, while cutting spending would incur the wrath of Labour MPs. So she is scrabbling around for tax increases that don’t break Labour’s manifesto commitment not to raise the rates of income tax, VAT or employee national insurance contributions.