PARLIAMENTARY DEBATE
Costs for Motorists - 21 May 2026 (Commons/Commons Chamber)

Before we come to the urgent question, let me repeat what I said to the House at the start of this parliamentary Session. The Government’s own ministerial code makes it clear that important policy announcements should be made in the first instance to this House when it is sitting. Some people seem to have very short memories. This announcement has been drip-fed to the media over the past three days. That is not in line with the Government’s own rules, and it is unacceptable. Back Benchers on either side have been elected to this House to hear such announcements first, instead of outside a Morrisons petrol station, on a bus, or on TikTok. Members should be respected. I uphold this House and I respect them, even when the Government do not. The Government have to get their act together and recognise the value of their own Back Benchers.

(Urgent Question): To ask the Chancellor of the Exchequer if she will make a statement on the Government’s plan for costs for motorists.

Mr Speaker, your comments have been fully noted, and I will ensure that they are fed back to the entire ministerial team.

The Government are taking steps to support households and businesses with fuel costs in response to the conflict in the middle east. A rapid de-escalation in the middle east remains the best way to bring down fuel prices. The most impactful step, of course, would be to reopen the strait of Hormuz. That is exactly why the UK Government are playing a leading role in the international effort to get shipping flowing freely. Indeed, I contrast that with the position of the Leader of the Opposition, who would have rushed us to war. [Interruption.]

Alongside this key step—[Interruption.] Mr Speaker, the boys’ club—

Order. I cannot hear what the Minister is saying. We have agreed to an urgent question in order to hear from the Minister. I am proud of this Parliament and of this country, so I want to hear what the Minister has to say.

Alongside this key step, the Government’s priority will continue to be helping families with the cost of living, including through protecting the public finances. The Government are taking action to bear down on prices at the pump, and in November we extended the 5p per litre cut in fuel duty for a further five months. Right now, petrol and diesel are 11p per litre cheaper than they would have been under the plans we inherited from the previous Government.

Some fuels have been more impacted than others by the conflict, and we recognise that. The Government also recognise the pressures being faced by drivers and other fuel users. That is why we are introducing a package worth over £400 million that combines broad support for motorists with targeted support for the sectors most exposed to and affected by higher fuel prices.

Yesterday the Prime Minister made it clear that we will not increase fuel duty this year. The temporary 5p cut will be extended until the end of the year. Taken together, the Government’s decisions will save the average motorist over £120 this year, compared with the plans we inherited from the previous Government.

We also recognise that farmers face substantially increased costs for fertiliser and fuel. That is why we are going further and cutting the duty rate on red diesel by over a third per litre, to the lowest rate in over 20 years. That will help other users of red diesel too.

The road haulage sector is vital for transporting goods across the country. Recognising the sector’s key role and the increased costs that it is facing, we are introducing a 12-month holiday from vehicle excise duty for the majority of heavy goods vehicles. This will save a typical HGV over £600—up to £912 for some vehicles—on top of the savings that I have just described for fuel duty.

To conclude, this change is one part of our support for households and businesses. It combines universal support for motorists with targeted support for those most affected by higher fuel prices. My right hon. Friend the Chancellor will update the House later today on further support measures for households and businesses.

May I begin by agreeing with you, Mr Speaker, and saying how disrespectful it is that this U-turn on fuel duty has already been released to the media earlier this week? The news was plastered across national newspapers on Monday, and yesterday the Chancellor conducted a visit to a petrol station with journalists, but it has taken until today for this House to be updated. This is a pattern, Mr Speaker—including, of course, the relentless briefings before the Budget last year about tax measures and fiscal forecasts. You would think that a Government with so little support among their own Back Benchers would have more respect for this place.

This change to fuel duty is yet another humiliating U-turn from a Chancellor and Prime Minister whose authority is shot. The Chancellor fought us tooth and nail on this issue. The Conservative party has been campaigning for a fuel duty freeze for months. The Chancellor repeatedly rejected those calls, creating unnecessary uncertainty for motorists and businesses. Why did it take her so long to realise that putting up fuel duty during an energy crisis is a bad idea? Does she really expect us to believe that this is all only happening, as she has suggested, because of better growth?

Let us be clear: the Chancellor has been pointing to the slight upward revision in the International Monetary Fund’s growth forecast earlier this week. That forecast was for growth of 1%, but until April the IMF was forecasting growth this year of 1.3%, so where is the supposed growth dividend? Perhaps the Minister can address that momentarily. Is the Chancellor seriously suggesting that the outlook is better now compared with how it looked at the last fiscal event? On wider measures, will the Minister confirm what has also been briefed to the press and not told to the House: that HM Revenue and Customs’ mileage rates are to be changed?

Let us be clear that this is a Government lurching from one U-turn to the next. Their mismanagement has left our economy weak. The reality is that they are in no position to support people through these cost of living pressures because they have mismanaged the economy. They have no credibility left, and clearly they have no respect for the House.

Put simply, as I said, the shadow Chancellor’s party would have had motorists hurtling full speed towards higher fuel costs. It is only because of the action that this Government have taken that we have applied the brake to the hikes that his party would have introduced. The Conservatives would have introduced higher costs; we are keeping the freeze on fuel duty and protecting millions of motorists right across the country. Exactly as I said, we are taking further measures on red diesel and for HGV drivers.

That is on top of additional action that we are taking on the cost of living. The shadow Chancellor and I saw each other in the studios earlier this morning when I was out there talking about the free, unlimited bus travel for children that the Chancellor will update us on—

Order. I just say to the Minister that if that was being said in the studios, rather than to the House, it is not a good example—it confirms that you somehow think that Sky or BBC are more important than Back Benchers, elected by constituents across this country, who must hear it second-hand. It is not acceptable. Do not think that it is a bonus to tell the House that now.

Mr Speaker, the Chancellor will come to the House later on today, and she—

Order. The point I was making was that you said you were doing the studios. You are here now, and I think it should have been announced here first. Do we both agree?

My apologies, Mr Speaker. I had intended to say just then that the Chancellor will come to the House and give a full statement on everything, including the matters that we are discussing.

I am sorry that the shadow Chancellor is so upset and appalled by the recent growth figures. I am in the business of talking this country up rather than down. Indeed, I am grateful to him for highlighting that growth has been revised up, interest rates are coming down, inflation is coming down and real wages are going up. As I said, that is because of the prudent decisions that the Government have taken, all of which are allowing us to take further action on the cost of living.

The action that we are taking on fuel duty is very important. It will save millions of motorists across this country a lot of money. I will address the point on HMRC mileage rates: as I said, the Chancellor will come to the House later and talk about the full package.

I call the Chair of the Business and Trade Committee.

Thank you for facilitating the urgent question, Mr Speaker. I welcome the announcements on fuel duty, but I did not hear the Chief Secretary say anything about remedies for the new costs on drivers of electric vehicles. Those new costs, imposed at the last Budget, are suppressing demand for electric vehicles to such an extent that UK automakers are having to subsidise demand by £5 billion a year. That is imperilling their future and imperilling the target of doubling automotive production by 2035. Can we have a statement about what the Government will do to reform the zero emission vehicle mandate and get in place a plan that leads to a thriving auto industry, not a dying one?

My right hon. Friend makes an important point. I know how passionate he is about these issues. He refers to changes made at the Budget, which were made with the best of intentions and from the point of view of encouraging the use of electric vehicles. I believe that the Chancellor may say something on that later on.

I call the Liberal Democrat spokesperson.

Like so many Labour Government announcements, the announcement to extend fuel duty relief later this year is too little, too late. When we look around the world, we see other countries acting now. Other countries are cutting fuel duty now. Other countries are cutting public transport costs now. That is why we Liberal Democrats continue to call on the Government to cut fuel duty and public transport costs now. What message does the Minister think it sends to people that the Government will take action later in the year when people are feeling the pain in their pockets right now?

On farmers, the Government will be aware that the cost of fertiliser is going through the roof; world prices are up 44%. The Minister says that there will be a further cut in duty on red diesel, but what assessment have the Government made of the cumulative impact of the war in Iran on farmers? It is clear to me that the cut in red diesel duty will not touch the sides when the cost of fertiliser is rocketing through the roof.

The hon. Member makes a really important point about the cost that farmers are facing, but that is exactly why we are taking steps to cut the duty on red diesel by more than a third to its lowest rate in over 20 years. As I said, that will help not just farmers, but other sectors, too, including in relation to freight. I am afraid that, as so often, we hear suggestions from the Liberal Democrats, “Cut this”, “Cut that”, “Try to bring things down”—[Interruption.]—but they are never funded. We manage the public finances—[Interruption.]

Order. The hon. Member for St Albans (Daisy Cooper) has asked her question and I want respect given to the Minister when she is answering it, please.

Thank you, Mr Speaker. The point is that we have to manage the public finances responsibly. We cannot put in place measures that are not fully funded, and I wish that some of the proposals being put forward were adequately backed up and fully funded.

These are welcome announcements, and I welcome the Chief Secretary to her place. The Government have a very important convening power, and one thing that residents in Oldham raise all the time is how much they pay for car insurance compared with those in other areas. For low-paid workers, particularly those who need their car for business, that additional premium represents a lot of money going out every year above and beyond what those in neighbouring areas pay. Will the Chief Secretary convene the insurance industry and see what can be done to finally address the postcode lottery?

My hon. Friend raises a really important issue, and I thank him for all the work that he has done in this space to try to bring down the cost for people across the country. In my old role as Economic Secretary to the Treasury, I was closer to the work of the insurance sector and the work that the current Economic Secretary is now taking forward to try to ensure that prices are brought down, but I am more than happy to convene with the new Economic Secretary and take forward the work that my hon. Friend suggests.

Obviously, the Minister is not aware that the previous Conservative Government froze fuel duty for 14 years. Some of us lobbied for the Government of the day to abolish the escalator, but we did not do it. However, may I ask her one key question? How much extra money has the Treasury obtained as a result of the rise in the wholesale price of fuel at the pumps?

I am afraid that the hon. Member has entirely missed the fact that the plans that his Government left in place would have seen fuel duty go up. It is only because of the action that this Government are taking that millions of motorists across the country will save money.

I welcome the efforts to support drivers at the petrol pumps, but this situation has not led to an increase in demand for electric vehicles. As the Chair of the Select Committee, my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) has said, the automotive sector is facing a real crisis because of the ZEV mandate. I was at the Vauxhall plant in my constituency last week; there is not, and there will not be, the consumer demand to meet the escalating demands of the ZEV mandate. Will the Treasury please use its convening power across Government to bring forward the review of the mandate?

As I said in response to my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), I appreciate that this is a really important issue, and I know what an important issue it is to my hon. Friend and his constituency too. As I said, I am more than happy to take up the matter, and I will discuss it with the Exchequer Secretary.

Increased fuel costs are a real pain point in a constituency like mine. Rural households that depend on their cars spend nearly £800 a year more on fuel than people who live in urban areas. Will the Government listen again to the Liberal Democrats’ demands for an immediate 10p cut in fuel duty, which would bring down pump prices by 12p per litre?

I think that these suggestions are being made with the best of intentions, but with the deepest respect to the hon. Member, this is all motherhood and apple pie. If we want to do these nice things, we have to be able to say where the money will come from.

I thank the Minister and my right hon. Friend the Chancellor for recognising the important role that hauliers and freight play in our national and local economies. The steps announced yesterday will hugely support the 3,500 people in my constituency who work in transport and logistics. These are the people who keep our shelves stocked and our economies moving. Will the Minister liaise with her colleagues in other Government Departments on what other support could be made available for the logistics sector, including improved welfare facilities?

My hon. Friend raises the important issue of hauliers and the road haulage sector. What we are discussing today is so critical to the costs that hauliers are paying, including vehicle excise duty, which of course is on top of the changes we are making to fuel duty to save hauliers money. This is one of the ways in which we are recognising the critical role that hauliers play in setting costs, including of consumer goods. All these things fit together, and I recognise how important the sector is to my hon. Friend’s constituency.

Rural drivers in West Worcestershire will be delighted that the Chief Secretary to the Treasury has seen the political reality that it would have been mad to put another 5p on petrol on 1 September, but can she explain to my constituents why we are not allowing oil and gas extraction from our own basin yet we are allowing an increase in Putin-produced oil and gas?

I am grateful to the hon. Member for her question, but if it would have been so mad to deal with fuel duty in that way, why was it her party’s intention to do exactly that? On oil and gas, we have been very clear that they will play a part in our fuel mix for years and years to come.

The Tories oversaw the only Parliament in history where living standards were lower at the end than they were at the start. This Government, by contrast, got wages up more in a year than the Tories did in a decade, with growth and inflation rates better than forecast. Does the Chief Secretary to the Treasury agree that ours is the best possible economic plan when it comes to delivering for my constituents, including their interests as motorists?

I am grateful to my hon. Friend for his question. It is because of the fiscally responsible choices that the Chancellor has made that growth and real wages have gone up, and inflation and interest rates have come down. [Interruption.] These things do not happen by accident; they are because of the fiscally responsible way that the Chancellor is managing our economy. That is fiscal responsibility for a purpose, that purpose being to support working people across this country.

I welcome the hon. and learned Lady to her new role in the Cabinet. She was an excellent colleague when she was on the NATO Parliamentary Assembly, and it does not surprise me that she is the first of her intake to make it.

It is in that spirit that I hope to be able to help the hon. and learned Lady in marking out her career. Some 90% of my constituency is rural, and increases in the price of fuel worry people. They do not put money into the economy because they do not know where that price will go. Will the hon. and learned Lady take the opportunity to do something that should have been done by the last Conservative Government? Rather than put out false figures for raising fuel duty that never happen, it would be a much better boost to the economy if people had certainty about their fuel costs.

I am very grateful to the right hon. Member for his kind comments. I appreciate where he is trying to go with his remarks, but what we are doing with this announcement is saving the average motorist over £120 this year, compared with the plans that we inherited. By saying—as the Prime Minister has—that we are going to extend the cut until 31 December, we are trying to give people a bit of certainty and reassurance. We recognise that family budgets are really stretched at the moment, which is why we are introducing this measure, and plenty of others, to try to help people with the cost of living.

Does the Chief Secretary to the Treasury agree that it is right that we did not rush into the Iran war and that our Government’s plans and actions to support households are responsive to changing events, rather than being knee-jerk reactions that end up causing more damage to our economy in the longer term?

My hon. Friend’s comments again highlight that the Conservative party would have raced to war. When I said that earlier—Conservative Members are doing it again; they are shaking their heads at me. The reality is—

Not true!

Okay. One of two things is true: either the Leader of the Opposition said that she would have taken us into the conflict and she did not mean it, in which case she is really confused, frankly; or she said it and she meant it, which is demonstrative of catastrophic judgment. Neither of those things—catastrophically bad judgment or deep confusion—is an ideal quality for someone who wants to run the country.

The Government have repeatedly pointed to the fuel finder website as the best way to keep prices low through competition. Yet in my constituency costs have gone up so much that there is basically no variation between the pumps. Those high prices are crippling for everyone, but particularly for local businesses such as the fish merchants from the East Neuk, who go far and beyond North East Fife to deliver to customers directly. Driving is not avoidable for a constituency such as mine. Obviously, the Government are not looking at the Lib Dem proposals, but why do they not offer meaningful support beyond red diesel in rural constituencies? What about EV charging, for example? Often, in constituencies such as mine, people have to charge away from home because they need their car to get about the constituency.

We are supporting motorists in a meaningful way and it is really important. The hon. Member mentioned the Competition and Markets Authority’s fuel finder scheme. The intention of that is to save households that own a car up to £40 a year. She is right that the key principle behind that is competition. We know that competition is the way that we get to greater choice and lower prices for consumers.

Will the Chief Secretary to the Treasury reassure me that the Treasury really understands that in rural areas the cost of fuel not only relates to what motorists pay for driving but affects everything—all the goods and services provided—on sale in the shops? Therefore, rather than trying to put caps on the things that are on sale in shops, the best way to help keep costs down in rural areas is to keep fuel costs down.

I have to tell the right hon. Member that we are not attempting to cap the prices in supermarkets and nor were we intending to do so. The Chancellor is having discussions with supermarkets, as she is with other sectors, with a view to putting downwards pressure on prices and helping people with the cost of living. As I have said repeatedly, we on the Government Benches recognise that there is a cost of living crisis out there, not least because of the inheritance we received from the Conservatives, and we are seeking to help people with those costs.

May I thank my hon. Friend for recognising and supporting hauliers and logistics companies, such as the Malcolm Group, the UK’s leading independent provider of third-party logistics services, which is based in my constituency and supports many hundreds of jobs across Paisley and Renfrewshire South? Those companies play such an important role in keeping our shelves stocked and our economies running. I echo the calls made by my hon. Friend the Member for Bathgate and Linlithgow (Kirsteen Sullivan) for us to go further in supporting greater welfare facilities for drivers. Will the Chief Secretary to the Treasury make some comment on the safety of logistics staff who, too often, man vehicles that are targeted by criminals?

I am glad to hear that the measures will help the Malcolm Group in my hon. Friend’s constituency, as indeed they will hauliers right across the country. She raises, as other hon. Members have, an important point around welfare. She also alludes to freight crime, which has been discussed at length in this House and is something in which I am particularly interested, given the nature of my constituency. The Government are taking forward action to seek to deal with freight crime, as well as taking action on welfare, but I would be more than happy to convene a meeting with other Ministers and my hon. Friend on the issue.

Does the Minister agree that one of the Government’s main responsibilities is to provide energy security for its citizens? As a nation resplendent with our own resources, why will this Government not issue more licences to drill in the North sea for oil and gas, which would make us energy-sufficient and have a knock-on effect at the pumps?

The best way to get to energy security is by doing exactly what the Secretary of State for Energy Security and Net Zero is doing at the moment with the push towards renewables. New licences in the North sea would not bring new oil and gas on stream for another 10 years, so they really are the wrong solution.

The freeze in fuel duty will be a relief to drivers in North East Hertfordshire, but part of the reason there is such a problem is that the Conservative party’s last stint in government left public transport virtually non-existent in rural communities such as mine. We discussed earlier this week the enormous cost of HS2—more than £100 billion. If we were investing at that scale in bus services, we could provide a vastly improved network across the whole country for decades to come. Will the Government learn the lessons of the current crisis and redirect our public transport spending towards the journeys we need to make in our day-to-day lives?

My hon. Friend raises an important point about the critical nature of bus services to the entire country. That is exactly why we are providing more than £3 billion for buses over the next three years, to cap fares at £3 and maintain and improve services. That includes funding for local authorities to put in place local fare initiatives if they wish to do so, as I believe the North East combined authority has done. We are also making reforms to bus franchising, which will allow for new and better services.

I wholeheartedly reject any accusation or idea whatsoever that we are somehow going soft on Russia and Putin. That is completely wrong. The new package of sanctions that we have introduced is stronger today—[Interruption.]

Order. I told the Front Benchers, and I am telling the Back Benchers: they have had the courtesy of being able to ask a question; I want them to hear the answer, and I need to hear it as well.

The package of sanctions in place today is stronger than the package of sanctions that was in place last week. We have a world-leading sanctions regime in this country: at the moment, we have more than 3,300 sanctions on Russian entities, businesses, individuals and ships—the list goes on and on. Why does it go on and on? It is because of our steadfast support for Ukraine.

Scotland is an energy superpower, so it is particularly galling for constituents and businesses in my constituency, which is a two and a half hour drive end to end, and where road vehicles are an absolute necessity to conduct daily life, to face the prices they currently face. Will the Government commit to using the hundreds of millions of pounds of extra tax revenue from VAT for a VAT freeze for the duration of the current crisis?

I will not commit to that, no.

While it is good news that the Chancellor has been forced into another humiliating U-turn over her increase to fuel duty, it just delays the increase until the end of the year. The cost of living is surging, and families are feeling the pinch in every aspect of their lives. Why will the Government not give people and businesses the certainty they need and cancel the fuel duty increase altogether?

There is absolutely nothing humiliating about the action being taken by the Chancellor and the Prime Minister to protect millions of motorists across this country. Again, I have to remind the hon. Member that the plans we inherited from the previous Government would have seen motorists paying more.

I welcome this latest U-turn by the Chancellor to freeze fuel duty, which will help my constituents, and I also welcome the cut in duty on red diesel to help our farmers. The Government’s carbon border adjustment mechanism comes into effect on 1 January. That will increase further the cost of fertiliser, which in turn will push up the price of food. Will the Chief Secretary undertake a review of that carbon border adjustment mechanism, to protect all our constituents from further food price increases?

I am grateful for the hon. Member highlighting the measures we are taking when it comes to red diesel. He mentions fertiliser costs. We know that substantially increased fertiliser costs, as well as fuel costs, are hurting farmers. That is exactly why we are taking these measures on red diesel, cutting the duty rate by over a third per litre from just over 10p to 6.5p, which, as I said, is the lowest rate for more than 20 years.

I warmly welcome the Chief Secretary to her new role. My rural constituency does not have a regular or reliable bus service. It does not even have a single mainline train station, so my constituents are forced to rely on their cars to get to school or work and to care for relatives, not to mention the transport of goods. I welcome this modest freeze, but please will the Minister meet me to discuss North Cornwall being part of the Government’s rural fuel duty relief scheme? While we are there, perhaps I can explain how our excellent Lib Dem proposals are all fully costed.

I am grateful to the hon. Member. I might ask that our meeting—when indeed we do meet, as I am happy to do so—is fully focused on the matters at hand.

Having worked in the oil industry, I understand the flow of oil products around the world quite well, and it is unquestionable that the Government have eased the prospect of Putin’s oil flowing into the UK’s oil market—that is beyond doubt. I have three questions for the Chief Secretary. Can she explain the Treasury’s calculation of the extent to which this move may benefit UK motorists? Can she explain why the Government have decided to do this, and can she tell us what she thinks the cost will be to the Government’s integrity and whether it is worth it?

I assume that the hon. Member is referring to the decision on licences in the sanctions regime. These licences are specific, targeted and will be reviewed on a very regular basis. Given that he understands the flows of oil so well, he will know that licences are a very common part of the sanctions regime. The reason these licences are being put in place is to stage the impact on the economy. Indeed, the European Union is going to achieve a full ban by the end of 2026—it, too, is staging the impact. This is a sensible measure when it comes to our economy. What is totally beyond doubt is our steadfast support for Ukraine and the pressure that we continue to put, with our international allies, on Vladimir Putin.