Budget measures to include fuel duty freeze and food tariff cuts

Key points

• The government will freeze fuel duty again in the Budget and keep the 5p discount.
• Removing tariffs on 100 food items could save households up to £21 per year.
• Carers will be allowed to earn more without losing their entire allowance, under a taper mechanism.

Chancellor John Healey's Budget will include a freeze on fuel duty and the removal of tariffs on 100 food items, the BBC understands. The government says the measures are part of Healey's pledge to give families "breathing space" with the cost of living.

The tariff cuts, combined with existing suspensions introduced in June on products such as pasta, fruit juice and tuna, could save households up to £21 per year, according to the government. Healey said the wars in Iran and Ukraine had "hit families here at home through higher everyday costs".

Other planned measures

The government also plans to end the so-called cliff-edge for carer's allowance by replacing the existing earnings limit with a taper mechanism. It will make permanent a 55p per mile tax-free mileage rate for work driving up to 10,000 miles, with the rate rising from 25p to 35p above that.

Self-employed fathers will receive two weeks of paternity pay, and hundreds of additional Post Office drop boxes will be rolled out to make sending parcels easier. The 5p fuel duty discount, first introduced in 2022 and extended since, is set to continue.

We can't control global events, but we can act where we can make a difference

— John Healey

Minimum wage and reaction

The Times reports that pay for 18 to 20-year-olds on the National Minimum Wage may rise by 3.9% from £10.85 to around £11.27 an hour. That is far below the 26% increase announced since Labour returned to power in 2024, and remains under the National Living Wage of £12.71, which is set to rise to £13.20.

Prime Minister Andy Burnham said the government was taking on big challenges while addressing everyday problems. Shadow chancellor Andrew Griffith said shoppers face rising costs and called the plan "an insult to families hammered by Labour's tax rises."