I am keenly aware fuel duty rates are a key issue for constituents living in rural areas without the public transport options available in towns and cities. Maintaining fuel duty at current levels would also help support households and businesses, especially with the cost-of-living crisis showing no sign of abating under this Labour Government.
However, at Autumn Budget 2025, the Chancellor, Rachel Reeves announced, that from April 2027, the fuel duty freeze which has been in place for 16 years will be scrapped along with the 5p cut put in place under the previous Government and that fuel duty will begin to rise with the Retail Price Index. This is expected to cost motorists £2.4 billion next year and £900 million a year thereafter.
On top of this, the Labour Chancellor chose to introduce a pay per mile tax on electric vehicles which is set to take effect from 2028/29 with an initial rate of 3p per mile that is set to cost the average driver an extra £255 a year. This charge will rise with inflation and is expected to raise £1.9 billion by 2030/31.
I completely agree with my colleague the shadow Chancellor, Mel Stride, who has said "if you own it, Labour will tax it. It would be wrong for Rachel Reeves to target commuters and car owners in this way just to help fill a black hole she has created in the public finances".
The RAC's Fuel Expert Simon Williams said that "the cost of simply keeping vehicles on the road has become a significant financial challenge" and the AA's President has described the measures as a "poll tax on wheels". I am also aware of Howard Cox's (the founder of FairFuelUK) comments that the fuel duty freeze has "been of immense benefit to Britain's motorists and has significantly strengthened the Treasury's finances due to the consequential reduction in inflationary pressure".
Unfortunately, as a result of the Chancellor's economic mismanagement and refusal to even consider spending cuts, this chaotic debacle of a Budget has proved to be a very difficult one for motorists.
