One of the UK’s largest business groups is warning that any rise in fuel duty would act as a major roadblock to economic recovery, urging Chancellor Rachel Reeves to consider a cut instead in her upcoming Autumn Statement.
Logistics UK, which represents businesses responsible for keeping the UK’s supply chains moving, argues that increasing fuel costs would deliver a damaging blow to the industry — and in turn to the wider economy — at a time when growth is fragile and consumer prices are still under pressure.
Kevin Green, Policy Director at Logistics UK, said: The most effective way this government could support our industry and help it to drive economic growth in the coming year is to not just avoid a rise in fuel duty, but to actually cut it.
"Logistics businesses ensure our shops, businesses, hospitals and homes are supplied with the goods they need.
"Increasing the duty payable on fuel, with no viable business alternative currently available, would not just hit our industry at a time when many businesses are struggling as a result of increased costs, but also mean an inflationary knock-on effect to consumers, who would receive a double whammy of increased prices in the shops as well as at the pumps.”
The group is calling on the Chancellor to take bold action by cutting fuel duty by 10p per litre. According to its analysis, such a move would slash national fuel costs by nearly £5 billion per year, offering both immediate relief to consumers and vital investment capacity for businesses.
“Rather than raising fuel duty, which would block off the growth our members could drive, we recommend Ms Reeves actually cuts it to kickstart increased economic activity and fuel growth across all sectors,” Green added.
“With business uncertainty still high, a bold move is needed to support our members and ensure they can deliver confidently for customers and consumers.”
Logistics UK’s Logistics Report 2025 reveals that fuel duty currently raises £24.3 billion for the Treasury annually, with £5.43 billion of that coming directly from the logistics sector. Fuel remains one of the largest costs for logistics operators, accounting for around one-third of their overall expenditure.
In a survey conducted for the report, over 60% of businesses said that cutting fuel duty is the top policy move the government could make to stimulate investment and growth.
With UK GDP growth forecast at just 1.1% for 2025, Logistics UK is pressing for swift action to inject momentum into the economy.
“We are operating in sluggish times,” Green continued. “Our Logistics Report shows that overall business confidence has declined compared to previous years. In this environment, we need a brave and confident government to take the steps needed to jump start the economy.
"A significant cut to fuel duty will free up levels of cash which can then be used to invest in the key areas that help keep the country trading – a move that would give the whole country the boost it needs to kickstart the economy.”