Chancellor Rachel Reeves is preparing a significant financial move affecting millions of UK drivers, with a series of motoring tax changes expected in the Labour Party's Autumn Budget on November 26.
Fuel Duty Increase and Pay-Per-Mile Plans
The government is reportedly considering a £100 a year increase to fuel duty. This change would primarily occur if the temporary 5p per litre cut to fuel duty is allowed to expire. According to analysis, this measure could cost households a collective £7.3 billion by 2029.
In addition to traditional fuel duty changes, the government is also developing a pay-per-mile charge for electric vehicles (EVs). This move would ensure that all road users contribute to government revenue as the transition to electric transport accelerates.
Industry Reaction and Financial Impact
Former BBC Top Gear presenter Vicki Butler-Henderson has described the planned measures as a "hit and run" on motorists. She highlighted that currently, around half the money paid to fill a tank goes to the government, amounting to approximately £850 per household annually.
Butler-Henderson explained the immediate impact on drivers: "On average a 50-litre tank of petrol will cost close to £70 – with a bit more for diesel." She suggested the government should look beyond motoring for revenue, stating: "I'd like to suggest the headlights move away from motoring and onto the world of high-tech and AI."
Political Context and Previous Policy
The planned changes represent a significant shift from the previous Conservative government's approach. Former Chancellor Jeremy Hunt froze fuel duty in his last Budget, preventing a potential 12p per litre duty hike that would have increased motoring costs by approximately £100 annually.
Mr Hunt had justified his decision by saying: "I know how much readers are feeling the pinch right now. Keeping it down means hard-working people will have an extra £100 this year without having to cut down using their vehicle."
With the new Budget announcement scheduled for November 26, motorists across the UK are awaiting confirmation of these measures and their potential impact on household budgets during a ongoing cost of living challenge.
