Autumn Budget 2024: Fuel duty frozen as hike would be the ‘wrong choice’
Chancellor Rachel Reeves has declared a rise in fuel duty in 2025 would be the “wrong choice” as she pledged to continue the freeze and maintain the temporary 5p cut for another year.
In her first Budget, Reeves told MPs that to retain the 5p cut and freeze fuel duty again would cost more than £3bn next year.
The Chancellor added that she has had to “take some very difficult decisions” on tax.
Reeves said: “Reeves said: “To retain the 5p cut and to freeze fuel duty again would cost over £3 billion next year.
“At a time when the fiscal position is so difficult, I have to be frank with the House that this is a substantial commitment to make.
“I have concluded that in these difficult circumstances – while the cost of living remains high and with a backdrop of global uncertainty – increasing fuel duty next year would be the wrong choice for working people.
“It would mean fuel duty rising by 7p per litre. So, I have today decided to freeze fuel duty next year and I will maintain the existing 5p cut for another year, too.
“There will be no higher taxes at the petrol pumps next year.”
Government figures show the average cost of a litre of petrol and diesel at UK forecourts is around £1.34 and £1.40 respectively.
Fuel duty freeze will ‘ease some pressure’
Reacting to the news, John Cassidy, managing director of sales at Close Brothers Motor Finance, said: “As the cost of car ownership continues to rise, this is one less thing for drivers to worry about in the short term. One in four (26 per cent) drivers already say cars are becoming unaffordable, and though a freeze is positive, petrol costs still remain relatively high.
“Whilst the freeze will ease some pressure on motorists’ wallets, the government will have an eye on the horizon and its planned 2030 ban on the sale of new petrol and diesel cars.
“It’s vital that in facilitating this transition, the government uses carrots as well as sticks and commits to strong investment in charging infrastructure.
“By doing this, there will be fewer challenges of electric vehicle ownership, and more consumers are given the option to move away from internal combustion engines.”
Howard Cox, founder of FairFuelUK, added: “I am delighted that Rachel Reeves has listened to FairFuelUK supporters and her party MPs’ constituents.
“She finally recognises that keeping Fuel Duty frozen is at the core of a laudable journey to economic growth.
“So, Rachel, that’s a great start. But please don’t rest on your laurels. Let’s build the first-ever road-user transport strategy that benefits the economy without your party’s false and emotional, scientifically baseless belief that the UK is the only country to save the planet and the motorist is to blame for all the environmental ills.
“That costly brainwashing must stop now. Start incentivising the UK’s 37m drivers and stop seeing them as an easy cash cow.”