Senior Conservatives have briefed the media over fears of a George Osborne ‘fudge’ on his promise to freeze fuel duty.
Sources have warned the Times that the chancellor could yet hit motorists with a fuel duty increase by raising the tax in line with inflation, thereby maintaining a real terms freeze despite prices rising at the pump.
A Conservative is reported to have told the paper that even during the election campaign ministers were warned to be careful over their wording when discussing the fuel duty freeze on TV.
A raft of other election promises on fiscal policy including freezing income tax, VAT or national insurance payments have left Osborne with little room to manoeuvre on fiscal policy this parliament.
If the tax increased from 59.95p a litre to 64.91p by 2019-20, it would add close to £5 to a 50-litre tank once VAT is added, but would benefit the Treasury by billions.
Over the last parliament, Mr Osborne froze fuel duty since 2010 and argued through a Treasury report that the cost had been almost completely offset by its benefit to the economy.
Mr Osborne has set an emergency budget for 8 July.
