Chancellor Rachel Reeves has confirmed that the planned 5p fuel duty increase will be cancelled, keeping fuel duty frozen for the remainder of the year. This decision comes after growing pressure on the Government to protect motorists from further pain at the pumps, especially in light of rising petrol and diesel prices influenced by geopolitical tensions, including the Iran conflict.
Households were bracing for higher costs later this year, but the Government prioritized easing the cost of living, recognizing the strain on families as winter approaches. Any fuel duty hike would have risked pushing prices higher, intensifying the financial burden on consumers and adding political challenges for the Prime Minister.
Alongside this announcement, Ms. Reeves introduced measures to support families, such as free bus travel for children and VAT reductions on summer attractions, reinforcing the Government’s commitment to relief amid the ongoing economic challenges.
John Wilmot, CEO of car leasing comparison site LeaseLoco, welcomed the news, highlighting its importance during a cost of living crisis influenced by fuel price volatility. However, he emphasized the need for further action, suggesting that cutting fuel tax rates could better assist drivers.
Labour leader Keir Starmer also welcomed measures to aid drivers, announcing a 12-month road tax holiday for hauliers and extending the fuel duty freeze. He attributed these supportive policies to sound economic decisions, noting the UK’s status as the fastest-growing G7 economy.