Millions to benefit from lower travel and food costs

• Government launches consultation on suspending tariffs on OVER 100 everyday essentials with the full list now available.
• This Government is the first in 15 years to uprate mileage rates for 3 million people who use their own vehicle for work, saving over £120 a year for a worker doing 6,000 business miles.
• The support is an additional saving for motorists following the Chancellor’s third extension to the fuel duty freeze which has put another £120 back into their pocket since last year.

Working people are set to benefit from further cost of living support, as the Government publishes a list of over 100 everyday essentials set to see targeted cuts to tariffs alongside uprating mileage rates for the first time in 15 years.

The consultation is seeking views from businesses and other stakeholders on the potential impacts of a second package. It covers a wide range of everyday essentials, from fresh fruit and vegetables, oil and baked goods, to chocolate, sauces, and soft drinks.

The list of 125 items include garlic, avocados, mangoes, nectarines, vegetable oil, olive oil and baked beans. This builds on the tariff suspension announced in April.

In parallel, we are also seeking views on whether suspension of tariffs on certain fertilisers could help farmers cope with the impact of rising fertiliser prices as a result of the conflict in the Middle East.

Chancellor of the Exchequer, Rachel Reeves, said:

The war in Iran isn’t our war, but one we will need to respond to, and my priority is keeping prices down for households and businesses.

That’s why we’re freezing fuel duty, increasing the mileage rate for the first time in 15 years and slashed VAT temporarily this Summer to help reduce the cost of days out.

This comes as carers, plumbers, builders and millions of other workers across the country who use their own vehicle on the job will have cheaper journeys after the Chancellor uprated mileage rates last week.

In the largest ever uprating of the rates a 10p per mile increase in tax‑free mileage rates for this tax year, backdated to April 2026, has been introduced to ease the cost of living for hardworking Britons.

Increasing the tax free per mile rates from 45p for the first 10,000 miles to 55p per mile will save around £120 for a worker doing 6,000 business miles. Up to two million employees and one million self-employed people will benefit.

This is in addition to savings drivers will make from the Chancellor’s further extension to the fuel duty freeze until the end of the year. That’s the third time Rachel Reeves has frozen fuel duty to support motorists, saving them £120 since last year.

Recognising how farmers and hauliers have been particularly exposed to high fuel prices, and their importance to UK supply chains, more relief has been announced.

For farmers and others who use red diesel and rebated biodiesel, the rate for those fuels has been cut by over a third – the lowest in over two decades. For hauliers, a road tax holiday has been put in place for a year from 1 July.

Transport Secretary Heidi Alexander said:

We are a government firmly on the side of drivers, and that means acting when hardworking people are being left out of pocket.

The people who use their own vehicle for work are the backbone of our country – the carers, the tradespeople and the public sector workers who keep services running. For too long, they have been expected to shoulder rising costs with support that simply has not kept up.

We’re doing all we can to ease everyday pressures on working people – that means real money back in their pockets and delivering for the people who keep Britain moving.

Andrea Egan, General Secretary, Unison said:

This simple measure will provide immediate help for countless frontline workers in public services. Particularly at a time when living costs are going through the roof once again.

People who need their own cars for work have been left thousands of pounds out of pocket for far too many years.

UNISON has campaigned hard for this long overdue change. It’s good to know the chancellor has listened to the concerns of staff penalised by frozen rates.

There’s still more to do to ensure no one is losing out and the union will continue to campaign for more over the coming months.”

This follows a much wider package of support rolled out by the Chancellor last week branded ‘Great British Summer Savings’. It includes free bus travel for 5–15-year-olds in England, VAT slashed on children’s meals in restaurants, and VAT cut for all admissions to theatres, theme parks and other attractions.

This will help families enjoy the weekend treats, days out and staycations that make life enjoyable during the cost-of-living squeeze caused by the war in the Middle East while supporting the businesses that depend on summer footfall.

Cutting £150 on average of costs from household energy bills, freezing prescription charges and rail fares, and increasing the national minimum and living wages by hundreds of pounds are some of the actions taken at the Budget that are continuing to support families each month.