Freeze on fuel duty to help struggling households: Cuts to air passenger duty and more childcare subsidies also proposed in the Autumn Statement

Theresa May has said middle and low-income families should be a priority
After weeks of tense talks, deal has now been struck between No 10 and 11
Other measures on the table include cuts to air passenger duty

By James Slack Political Editor For The Daily Mail

Published: 00:46 GMT, 17 November 2016 | Updated: 00:51 GMT, 17 November 2016

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Fuel duty is expected to be frozen next week under a Government package to help voters who ‘just about managing’ – or JAMs - to balance the family budget.

Theresa May has told Chancellor Philip Hammond to make middle and low-income families a priority in next week’s Autumn Statement.

After weeks of tense talks, a deal has now been struck between Number Ten and Eleven.

Fuel duty is expected to be frozen next week under a Government package to help voters who ‘just about managing’ – or JAMs - to balance the family budget

Other measures on the table include cuts to air passenger duty to help families with the cost of a foreign holiday and more childcare subsidies.

Mr Hammond will also commit to honouring Tory manifesto commitments to raise the income tax threshold to £12,500 and to raise to £50,000 the threshold for the 40p higher rate of tax.

Mrs May coined the term ‘just about managing’ on the steps of Number Ten after becoming Prime Minister.

Treasury officials are now using the shorthand JAMs.

Mrs May’s predecessor, David Cameron, had referred to the ‘squeezed middle’.

Mr Hammond wanted a ‘sober’ Autumn statement focussed on making the nation’s finances sound, post-Brexit

Whitehall sources said that said that negotiations had been fraught, and involved a number of tense meetings.

Treasury officials are said to have described relations between the teams representing the Chancellor and PM as ‘bad’.

Mr Hammond wanted a ‘sober’ Autumn statement focussed on making the nation’s finances sound, post-Brexit.

However, Mrs May was insistent that more should be done to help people who are struggling to make ends meet.

Treasury officials yesterday confirmed that next Wednesday’s statement would now focus on people who are ‘just about managing’.

There have been simmering tensions between the Chancellor and senior Cabinet figures, who have been irritated by his gloomy tone on the economy.

Labour and Tory MPs have both been pressing the Chancellor to cut fuel duty – which they insist will not harm the Treasury.

A study by the Centre for Economics and Business Research found that a cut in 3p could create 8,000 jobs and would add billions to the value of UK businesses.

Even a continued freeze in fuel duty would save the poorest households more than £120 a year.

Neither move would cost the Treasury any money because the boost to the economy would result in higher tax receipts elsewhere.

However, Mrs May was insistent that more should be done to help people who are struggling to make ends meet

George Osborne did not increase fuel duty for six years in a row, and the current Chancellor is under pressure to continue the trend, or even improve it.

Tory MP Charlie Elphicke said: ‘The CEBR report is a powerful reminder that the freeze in fuel duty has benefited drivers, helped boost the economy and hasn’t cost the Treasury a penny.

‘I hope the Chancellor will consider this report and continue to keep the duty low and to cut it if there is room to do so in the public finances.’