Business furious with Chancellor over fuel ‘profiteering’ blame game | Politics | News

The Chancellor found himself under fire from many quarters last night; Senior businessmen, the opposition leader and oil retailers were lining up to accuse Rachel Reeves of being the real profiteer in Britain’s fuel crisis.

The attack occurred at a sensitive moment. For weeks Downing Street blamed forecourt operators; Both the Prime Minister and the Chancellor suggested that it was retailers, not the Treasury, who were clamping down on drivers. The business community’s response has been to turn this debate on its head.

Their situation is simple: every time pump prices increase, the Government’s tax withdrawal from VAT and fuel duty increases with it. Retailers’ margins remain stable. The Chancellor does not do this.

Lord Wolfson draws a line

Chairman Lord Wolfson reportedly made the demand from industry clear.

“I think a reasonable demand from our industry (and indeed from the whole industry) is that the Government should not profit from this,” he is understood to have said.

“That would be a very reasonable request to say to the Government: ‘Don’t actually make more money from this than you expect.'”

Badenoch goes on the offensive

The Conservative leader arrived at the fuel industry event in a Fuel Britannia-branded tanker – a theatrical display designed to highlight his solidarity with forecourt operators who felt they were scapegoated, the Daily Mail reported – outlining how he was demanding an apology from Labor after it became clear evidence of price gouging by oil firms was weak at best.

Frontline bosses reportedly said they ‘work hard and get up early’. They are taxed to the top.

“They are being blamed for fuel tax price increases. In fact, it was Rachel Reeves who was doing the price gouging.”

Speaking separately at a construction site in west London, Badenoch broadened his attack by accusing Labor of continuing economic policies that he described as ‘impoverishing households, families and businesses’.

“It’s time to scrap Rachel Reeves’ stupid fuel tax increase. It’s time to get Britain working again,” he said.

Who really makes the money?

The RAC set the current retailer margin at six per cent per litre; this figure has remained largely constant. The government’s attitude is quite different. The fixed fuel tax stands at 52.95 pence per liter sold, and since VAT is collected at a rate of 20 percent on the total pump price, every penny of price inflation is directly reflected in Treasury revenues.

Price increases resulting from the war have added around 15 pence to the cost of a liter of petrol and 30 pence to the cost of diesel since the start of hostilities. An analysis published this week reveals the additional burden on British motorists is more than £300 million.

Fuel duty increases are planned to be 1p, 2p and 2p respectively for September, December and March 2027; This is a pipeline of increases that Labor has shown no desire to reverse.

Downing Street impasse

Behind the public war of words lies a more complex private confrontation. The government summoned oil companies and energy suppliers to Downing Street and told them directly to stop overcharging. Frontline operators walked out of the first meeting, upset with the confrontational framing coming from Whitehall, and were eventually talked back to the table.

Former BP executive Nick Butler yesterday outlined a definitive timeline for the situation, warning that oil and gas shortages could occur within two to three weeks. On the same day, a Tesco store in Worcester sold its last drop of fuel, according to the report.

The Express understands government ministers have argued drivers have no reason to change their behavior and there is no contingency planning for power cuts or rationing.

Reform and M&S add sounds

Reform treasury spokesman Robert Jenrick demanded Reeves halve VAT on petrol for a three-month period.

“It generates tens of millions of pounds a week in extra tax revenue as a direct result of the war; it could at least cushion the blow,” he said.

M&S chief Stuart Machin took a different but equally sharp perspective; He took aim at green taxes embedded in energy bills that he said had no relationship to the underlying cost of oil or gas.

He said the costs of this policy had become “far from sustainable”, ballooning to account for more than half of M&S’s total energy bill.

“Over the last few years, the ‘policy costs’ on our energy bill have skyrocketed,” Machin wrote on LinkedIn. He reserved his harshest words for Labour’s employment taxes, branding them “let down a generation of children”.

A Treasury source was reported to have said: “We have taken action to stop companies exploiting this crisis – and if they do, we will crack down on it – because Labor is on the side of workers.”