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Petrol/Derv Duty

Volume 929: debated on Tuesday 29 March 1977

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The taxation of road fuel was not affected by my December measures and the total effect on the private motorist of the changes in my Budget last spring amounted to no more than about 1p a gallon. My measures last year had a greater effect on the business user of road fuel, but for him it was the first increase in the taxation of derv for seven years. In these circumstances I feel justified in proposing an increase in the duty on road fuel of 5p a gallon. If fully passed on, this would raise the price of a gallon of petrol to the private motorist by a little over 5½p, including VAT. This increase does no more than restore the real value of the duty on petrol to its level after my last Budget. [ Interruption.] I thought that the Conservative Party favoured indexation of taxes. Petrol will still be cheaper in Britain than in nearly all other countries of the European Community. My proposals for road fuel duty will produce an overall revenue increase, including VAT, of £300 million in a full year. The rebate of road fuel duty paid to stage bus operators will be increased so

that their costs will not be affected by the rise in the duty.