Chancellor John Healey has extended the fuel duty cut until July 2027 in his first Budget, a move welcomed by campaign group FairFuelUK, which nonetheless insists the Government has not gone far enough to support motorists.
Announcing the measure to MPs on Wednesday, October 28, Mr Healey said the Government was extending tax cuts for motorists through the winter and spring into July to support households, hauliers and farmers.
Campaigners call for more action
Howard Cox, founder of FairFuelUK, said it was right not to increase fuel duty, but described it as the least ministers could do amid "painfully high" costs for motorists.
"Thank goodness a smidgeon of common sense has prevailed," he said. "Freezing Fuel Duty is a victory for drivers, businesses, and sustained campaigning. But let's be absolutely clear: a freeze is not a cut."
He added: "Millions of drivers, small businesses, hauliers, farmers and tradespeople are already being battered by painfully high petrol and diesel prices. Simply deciding not to make those prices even worse through higher taxation is the very least the Government should be doing."
Pressure on pump prices
Fuel duty rates had been set to rise earlier this year, but the planned increases were delayed by Mr Healey's predecessor Rachel Reeves and former PM Sir Keir Starmer. The first 3p rise was scheduled to take effect in January.
The economic aftershocks of US and Israeli attacks on Iran earlier this year sent fuel bills soaring, with diesel rates rising above previous all-time highs earlier this month.
Mr Cox said FairFuelUK has fought for years to keep fuel taxes low and "make politicians understand that drivers are not cash cows". He said the fuel duty decision "shows that when the government listens to motorists, common sense can prevail".
The campaigner called for more action on high pump prices and for Mr Burnham, Mr Healey and Transport Secretary Heidi Alexander to meet with him to discuss his proposals. HM Treasury has been approached for comment.
Mileage rate increase
Mr Healey also announced that "anyone who relies on their car for their work, from care workers to engineers, I am increasing the higher mileage rate from 25p to 35p per mile, and making permanent the increase to the standard mileage rate introduced earlier this year".
