Policy & Resources wants the duty put up by 4.3%, but Deputy Jayne Ozanne is preparing an amendment which would instead increase it by only 2.3%.
With inflation expected to average about 3.3% next year, P&R’s proposal would raise the duty by inflation plus 1%, whereas Deputy Ozanne’s counter-proposal is for inflation minus 1% – effectively cutting the duty in real terms.
Fuel duty has already gone up from about 52p to 87p per litre over the past 10 years – nearly double the rate of inflation in that time.
‘Many hard-working islanders are really struggling with the cost of living,’ said Deputy Ozanne.
‘The proposed increase in fuel duty is an unfair tax disproportionately hitting the less affluent, as they are least likely to be able to afford an electric vehicle and the most likely to be driving older vehicles which are less fuel efficient.
‘They are unfairly penalised by a system which rewards those who can afford to switch to electric vehicles or buy newer cars while laying heavier burdens on those who can least afford to carry them.
‘Putting it bluntly, this is a budget measure which makes the poor even poorer.’
If approved, Deputy Ozanne’s amendment would cut the cost of filling up an average car by up to £1.
She estimated that it would reduce States income by about £400,000 next year, but was awaiting detailed figures from treasury officials who have made themselves available to assist members considering budget amendments.
P&R is already battling a long-term problem of the duty raising less income each year as a result of more efficient vehicles and people switching to forms of transport which do not require motor fuel.
That problem has partially driven the need for above-inflation increases in fuel duty in recent years and a direction to consider alternative transport taxes has not been progressed as quickly as intended.
Deputy Ozanne argued that less affluent households could not continue to pay the price, and she hoped the new Assembly would send a clear signal that it understood cost of living pressures and would act to ease them.
She acknowledged that her amendment would provide limited relief, but described it as a start towards shifts in the tax burden which she would like to see go much further.
‘While the Budget includes measures to incentivise landlords and help homeowners, I see little that will help those who spend a significant amount of their take home pay on rent,’ she said.
‘Personally I would like to see a form of rent relief in the same way we have considered mortgage relief, but I doubt there would be much appetite for that among my colleagues.
‘The key, as we know, is to increase housing supply, but that will not happen overnight. That is why I am looking at other creative ways of helping people.’
Amendments must be submitted by a week on Monday ahead of the Budget debate starting on Tuesday 4 November.
You need to be logged in to comment. If you had an account on our previous site, you can migrate your old account and comment profile to this site by visiting this page and entering the email address for your old account. We'll then send you an email with a link to follow to complete the process.