Burnham Extends Fuel Duty Cut and Plans EV Tax

Prime Minister Andy Burnham and Chancellor John Healey are implementing a series of taxation policies to balance government revenue with cost-of-living relief. To mitigate the impact of surging fuel prices following the war in Iran, the government extended a temporary 5p per litre fuel duty cut on petrol and diesel until December 31, 2026. HM Revenue & Customs confirmed the rate will remain at 52.95p per litre until January 1, 2027, before rising to 57.95p by March 2027.

In contrast, the government is moving forward with the electric Vehicle Excise Duty (eVED) system scheduled for 2028. This policy introduces a 3p pay-per-mile tax for electric vehicle motorists. Research indicates significant opposition, with 62% of drivers stating they may be discouraged from switching to electric vehicles and 26% citing complications for business travel expense claims.

Burnham has pledged a cost-of-living approach, augmenting these measures with a six-month VAT cut on electricity bills, a £2 bus fare cap, and VAT reductions for pubs and clubs. HM Treasury stated that the fuel duty measures are intended to support citizens against the economic pressures caused by the conflict in Iran.