Chancellor John Healey condemned for refusing to use his Iran war VAT windfall from sky-high pump prices to cut Fuel Duty in the Budget

John Healey was condemned today for refusing to use his Iran war VAT windfall from sky-high pump prices to cut Fuel Duty.The Chancellor claimed he was doing drivers a favour by freezing the levy until July next year in today's Budget.Labour had originally planned to hike Fuel Duty by 5p a litre from January 1.But motoring groups said he should have gone further by cutting the levy by at least 5p a litre to help working families struggling to make ends meet.And Tory leader Kemi Badenoch blasted that he should 'do better than that’.They pointed out he’s raked in a £1.7billion VAT windfall at the pumps since the Iran war erupted on February 28, as the 20 per cent levy accounts for a larger slice towards Treasury coffers when fuel prices spiral.Prices have rocketed since the Iran conflict started, collectively costing drivers an estimated extra £10billion at the pumps over the last eight months.But rather than cut Fuel Duty, the Chancellor announced a freeze. The Chancellor claimed he was doing drivers a favour by freezing Fuel Duty until July next year in today's Budget Tory leader Kemi Badenoch blasted that Chancellor John Healey should 'do better than that’ on Fuel Duty, when responding in the Commons Pump prices have rocketed since the Iran conflict started, collectively costing drivers an estimated extra £10billion over the last eight months, netting Mr Healey a £1.7bn VAT windfallIt means taxes – including VAT, which is charged on top of Fuel Duty – will still account for nearly half (47 per cent) of the cost of a fill-up with petrol. For diesel, the levies will account for 43 per cent of the cost.AA President Edmund King said: ‘The Chancellor could have gone further and cut Fuel Duty by an extra 5p, even if only for diesel which is the workhorse fuel for UK PLC.‘Increased VAT receipts from fuel could have helped fund this.’In a nod to Halloween being a few days away, he added: ‘Delaying the Fuel Duty increase is a welcome “trick”, but no “treat” for drivers.’Steve Gooding, director of the RAC Foundation, said: ‘The Chancellor said cheaper energy is his top priority but that doesn't seem to include the energy sold at the pumps - petrol and diesel.‘Delaying a planned hike in Fuel Duty is welcome, but falls short of actually making the cost of re-fuelling cheaper.‘Meanwhile, the Treasury will still receive getting on for half of everything paid on the forecourts.‘The war in the Gulf has already cost drivers an extra £10billion and it unfortunately looks set to cost billions more in the months ahead.’The RAC’s Rod Dennis added: ‘While drivers may breathe a mild sigh of relief knowing that Fuel Duty isn’t about to suddenly go up, many are likely to be disappointed the Chancellor didn’t go further to support them – not least as the freeze is only in place until next summer.‘A freeze only avoids making an already difficult situation worse – it doesn’t make filling up any cheaper.‘Drivers will now have to hope for an easing of the international conflicts that have pushed up oil prices and disrupted fuel supplies if pump prices are to come down in a meaningful way.’A 5p a litre cut to Fuel Duty, which is currently charged at 52.95p a litre, was first introduced by the Tories in 2022 to help out motorists amid sky-high pump prices caused by Russia’s invasion of Ukraine. AA President Edmund King said 'the Chancellor could have gone further and cut Fuel Duty by an extra 5p' Steve Gooding, director of the RAC Foundation, said 'delaying a planned hike in Fuel Duty is welcome, but falls short of actually making the cost of re-fuelling cheaper' The average cost of diesel at forecourts hit a record high last month of more than £2 a litre, surging past the previous record of 199.09p set in June 2022 after Russia's invasion of UkraineBut Labour has only extended the freeze rather than cut the tax.Announcing that he was extending the freeze again in today's Budget, Mr Healey said: ‘Earlier this year, the Government extended the 5p cut to fuel duty and slashed red diesel to its lowest rate in over 20 years.‘With the war in the Middle East still driving high fuel prices, I am extending these tax cuts for motorists through the winter and spring to July, supporting households, hauliers, and farmers.’But in her response, Ms Badenoch said: ‘I am glad to see that he has agreed with our campaign on the previous Chancellor’s Fuel Duty rise.‘Motorists will be pleased. That would have inflicted real pain, especially while petrol prices are so high.‘But they’ll go up in July. Why? We froze Fuel Duty for 14 years. They can do better than that.’It comes as global oil prices hit their highest for more than six months last week amid fears of fresh escalation in the Middle East conflict.Brent crude, the international benchmark for oil, surged past $117 a barrel at one point – its highest level since April.It suggests motorists face further pain at the pumps for months to come, just as energy bills are also set to rise in January, squeezing households further.The average cost of diesel at forecourts hit a record high last month of more than £2 a litre, surging past the previous record of 199.09p set in June 2022 after Russia's invasion.Today, the average cost of a litre of unleaded petrol at UK forecourts was 172.92p, while diesel was 198.79p.Before the war, they were 132.83p a litre and 142.38p respectively.It means filling up the average family car with petrol is around £23 more costly now than before the war, and £30 for diesel.