Fuel Duty Change Will Deliver Inflationary Timebomb

Commenting on Chancellor Rachel Reeves' announcement in the Budget of an increase in fuel duty from September 2026, Logistics UK Acting Chief Executive Kevin Green said,  "Instead of nurturing the green shoots of economic recovery, the government risks stamping them out. The increase in fuel duty announced in the Budget will mean hundreds of millions in increased taxes for logistics businesses, much of which will be passed onto households and businesses, as well as hitting motorists directly - fuelling inflation across the economy.

It is a short-sighted decision that fails to appreciate logistics' role in the economy - logistics costs are embedded in all products from food and medicines to construction materials and consumer goods: increasing logistics taxes mean increased costs for everyone.   "Logistics businesses already pay around GBP5.5 billion a year in fuel duty - increasing the tax burden on our industry shows a disregard for a sector that generates GBP170 billion for the UK economy, employs over 8% of the nation's workforce and is key to the government's growth agenda. We urge the Chancellor to reconsider this decision at the earliest possible opportunity, or risk an inflationary impact right across the economy in the spring." 

Logistics UK is one of the UK's biggest business groups, representing logistics businesses which are vital to keeping the UK trading, and more than seven million people directly employed in the making, selling and moving of goods. With decarbonisation, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. Logistics UK supports, shapes and stands up for safe and efficient logistics, and is the only business group which represents the whole industry, with members from the road, rail, water and air industries, as well as the buyers of freight services such as retailers and manufacturers whose businesses depend on the efficient movement of goods.

For more information about the organisation and its work, please visit www.logistics.org.uk.  

Transport & Logistics - Driving The Industry Forward