Petrol and diesel drivers handed 'major victory' with rule change under Labour

Fuel duty will remain frozen in a major victory for drivers as Labour Party government Rachel Reeves spares motorists from Budget tax hikes. Reeves said it would be the “wrong choice” to increase fuel duty next year, saying she would continue the freeze and maintain the temporary 5p cut for another year.

She told MPs she has to “take some very difficult decisions” on tax, and noted to retain the 5p cut and freeze fuel duty again would cost more than £3 billion next year. The Chancellor said: “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."

READ MORE New £175 charge for drivers starting today is 'disaster'

It comes as Reeves has been urged by MPs to “think again” when it comes to means-testing the winter fuel payments and increase the threshold for the allowance. In the Commons, Conservative former minister Dame Harriett Baldwin said: “The living standards of a 90-year-old pensioner on a £13,500 income are falling sharply this winter, as a result of her decision to take away the winter fuel allowance. Tomorrow she has the chance to increase that threshold, will she take it?”

Ms Reeves replied: “(Dame Harriet) will know that because of our commitment to the triple lock that the basic state pension and the new state pension will continue to rise. In fact, this winter the new state pension is worth £900 more than it was a year ago and the new state pension is likely to rise by a further £450 next April.

“Indeed, during the course of this Parliament, because of the triple lock the new state pension is likely to be worth £1,700 more, much more than the value of the winter fuel payments.”