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Howard Cox of FairFuelUK warns of impact of Rachel Reeves’ plans to hike up petrol costs by 10p a litre and pay-per-mile new road tax scheme

Kent’s motorists are set to be “fleeced on a scale not seen for years” according to a leading campaigner.

It comes as the new government looks to hike up costs in order to swell Whitehall coffers as it faces what the Labour administration calls a £22 billion “black hole” in public finances.

We should all brace ourselves for a hike in prices at the pumps
We should all brace ourselves for a hike in prices at the pumps

But it will mean another blow to the pockets of the county’s long-suffering road users who have faced years of high petrol prices, the expansion of ULEZ up to its borders with Greater London and who continue to pay the Dart Charge despite an initial promise it would be scrapped years ago.

Not to mention the regular disruption caused by Operation Brock and delays at our ports.

Now Keir Starmer’s team seem set to usher in a dramatic hike in fuel duty costs by what is feared to be as much as 10p a litre.

Fuel duty has stood at 57.95p a litre since 2011, with a 5p cut ushered in by the Tory government in 2022.

VAT - at 20% - is then charged on top of the total cost, swelling the price of how much we pay at the pumps.

Chancellor Rachel Reeves is set to hike fuel duty in October’s Budget - and could usher in a new vehicle tax scheme too. Picture: Parliament TV
Chancellor Rachel Reeves is set to hike fuel duty in October’s Budget - and could usher in a new vehicle tax scheme too. Picture: Parliament TV

The speculation suggests Chancellor Rachel Reeves will signal fuel duty will return to its full level during her October Budget.

But that’s not all.

The biggest change is set to be a transformation of car tax, with speculation it could be announced as soon as October.

It would see the existing Vehicle Excise Duty (VED) tax - commonly referred to as road tax - scrapped. Currently, the annual cost is determined by the sort of vehicle you own. Those that are more polluting tend to pay the highest cost.

But as an incentive to encourage more motorists to switch to electric vehicles, road tax was dropped for those vehicles with zero emissions until April 2025 when plans for them to pay at the lowest scale are due to start.

Electric cars are growing in popularity - but that equates to a decline in tax the government gets from users. Picture: New AutoMotive
Electric cars are growing in popularity - but that equates to a decline in tax the government gets from users. Picture: New AutoMotive

The consequence of that has been a significant drop in revenues generated for the government

With the money raised through car tax going into central coffers - and not a pot, as many assume, for road upkeep and infrastructure - Keir Starmer is likely to fire the gun on reform which could generate billions of pounds.

And that is likely to include a long-discussed ‘pay-per-mile’ tax strategy for all cars - including electric and plug-in hybrids.

Recommended by a House of Commons Transport Committee back in 2022, it warned: “As sales of electric vehicles increase, Treasury revenue from motoring taxation will decrease, because neither fuel duty nor VED are currently levied on electric vehicles.

“Without reform, policies to deliver net zero emissions by 2050 will result in zero revenue for the government from motoring taxation. The committee urges the government to act now to replace a potential loss of £35 billion to the Exchequer.”

Operation Brock has been a thorn in the side of motorists in the county for years. Picture: Barry Goodwin
Operation Brock has been a thorn in the side of motorists in the county for years. Picture: Barry Goodwin

This would see electric car users - and their popularity is particularly high as a fleet car - have to pay for the first time.

While no details have yet been released, taxation rates are expected to be a combination of how many miles travelled annually and a vehicle’s emissions.

Cranbrook-based Howard Cox is founder of FairFuelUK - a campaign group which has long fought for a reduction in prices at the pumps and a fairer deal for motorists.

He believes a fuel price hike is already nailed on.

He says: “I have credible intelligence that the Treasury has virtually settled, through its internal economic modelling, on increasing fuel duty by 10p a litre.

Howard Cox, Cranbrook-based FairFuelUK campaigner
Howard Cox, Cranbrook-based FairFuelUK campaigner

“For nearly 15 years, I have proven that hiking levies on one of the highest-taxed motorist sectors in the world would damage the economy, jobs, inflation, business investment and freedom of movement.

“Such a punitive hike will also stifle growth.

“The inevitable move to Big Brother pay-per-mile taxation, which Labour plans to work alongside the declining fuel duty income, will undoubtedly be announced in the Budget too.

“I predict the net outcome from the October Budget is that the UK’s 37 million drivers are set to be fleeced on a scale not seen since 1997 to 2010 when Labour increased fuel duty by a staggering 46%.”

Mr Cox stood as a Reform UK candidate in the recent London Mayor elections, finishing fifth with 3.2% of the votes.

Kent’s motorists are no strangers to paying extra…the toll for the Dartford Crossing was supposed to be scrapped years ago
Kent’s motorists are no strangers to paying extra…the toll for the Dartford Crossing was supposed to be scrapped years ago

Motoring organisation the RAC agreed an increase in pump prices was inevitable - but warned forecourts were guilty of not reflecting in their prices a drop in wholesale costs of petrol and diesel.

RAC head of policy Simon Williams said: “We’ve reached the conclusion the Chancellor has no option but to put fuel duty back up to 58p a litre in October’s Budget.

“She knows the 5p discount is losing the Treasury £2bn a year. She also knows drivers were overcharged by a staggering £1.6bn last year according to the Competition and Markets Authority’s recent report.

“We’d normally be against any increase in duty, but we’ve long been saying drivers haven’t been benefitting from the current discount due to much higher-than-average retailer margins.

“As more and more EVs come onto the roads the government will need to tax drivers differently. We think replacing fuel duty with a pay-per-mile system as soon as possible is the way forward as then the only tax levied on fuel would be VAT. This would give retailers nowhere to hide.”

A Treasury spokesperson said in response to the claims simply: “The Chancellor will set out decisions on tax policy at the Budget on October 30.”

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