Chancellor Rachel Reeves Faces £30B Budget Pressure Amid Fuel Duty Cut Debate

Rachel Reeves, the UK Chancellor, is facing significant pressure ahead of the upcoming Autumn Budget to address a fiscal shortfall that could be as high as £30 billion, according to forecasts from the Office for Budget Responsibility (OBR). Despite Labour's manifesto pledges not to raise national insurance, VAT, or income tax, there is growing debate within the party and government about potentially breaking these commitments to avoid a patchwork of small tax increases, sometimes referred to as a "pasty tax" budget. A major focus is the 5p per litre fuel duty cut, initially introduced in 2022 and extended by Labour, which the OBR assumes will be reversed, potentially resulting in a fuel duty hike for the first time in 15 years. This proposed increase has sparked concerns due to its impact on working people and inflation, with campaign groups like FairFuelUK warning of higher costs at the pump. Although Reeves has previously frozen fuel duty and pledged no immediate tax rises at petrol pumps, pressure is mounting within government and from fiscal watchdogs to reconsider this stance to help balance the nation’s finances amid challenging economic conditions. The Chancellor is also lobbying for the OBR to factor in growth measures from government policies to mitigate the budget gap, while ministers express frustration over the timing and pessimism of economic forecasts.