Labour to hike fuel duty in ‘painful’ budget as motorists warned over tax U-turn | UK | News

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Motorists are being urged to brace for a hike in fuel duty in the upcoming Government Budget after Prime Minister Keir Starmer confirmed finances were “worse than ever imagined”.

On Tuesday, August 27 Sir Keir Starmer delivered a speech in the Downing Street garden to address how the Labour government would on fix the foundations of our country. In his speech he said the country needs to “accept short term pain for long term good” and described the upcoming October budget as “painful”.

It is claimed the Government is aiming to plug a reported £22billion black hole in public finances. For many, the move signalled officials could be on the verge of raising taxes with fuel duty not off the table , despite Sir Keir Starmer ‘s pledge not to increase taxes on working people.

The Conservative government had previously introduced a 5p per litre reduction in fuel duty in March 2022. Prior to this, the fuel level had been frozen at 57.95p since March 2011, with VAT charged at an additional 20% on top of the total price.

In his speech Sir Keir Starmer stressed: “I won’t shy away from making unpopular decisions now, if it’s the right thing for the country in the long term.” And an increase of 5p in fuel duty would go some way to fill the £22 billion black hole identified by Rachel Reeves.

Chancellor Rachel Reeves has already laid the ground for tax rises. In the clearest sign yet of her plans, at the end of July, she said: “I think that we will have to increase taxes in the Budget” when asked whether they would be raised.

Speaking on Wednesday morning, she again refused to rule out a rise in inheritance tax or capital gains tax when directly asked. “I’m not going to write a Budget two months ahead of delivering it,” she said, before adding: “We’re going to have to make difficult decisions in a range of areas.”

When asked if he acknowledged that a rise in fuel duty would be a tax on working people, and whether he would rule it out, Sir Keir Starmer said: “Well, look, firstly, we made very clear pledges before the election in relation to tax on working people.

“You’ve all heard it a number of times over in relation to income tax, VAT and national insurance. We absolutely stick by that. Beyond that, I’m not going to speculate about the Budget,” The Telegraph reports.

The Chancellor has announced that the Autumn Budget will take place on Wednesday, October 30 2024.



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