Category: Uncategorized

UK business leaders have urged the government not to increase employment costs in the upcoming Autumn Budget, warning that higher taxes could force small firms to raise prices and worsen inflation.
A new survey by Employment Hero found that 86 per cent of 1,000 business leaders are worried about what the Budget will mean for their companies, with 59 per cent saying they believe the government does not take the needs of small businesses into account when setting fiscal policy.
The concern comes after employer National Insurance contributions (NICs) rose from 13.8 per cent to 15.05 per cent in April — a move that many SMEs say has already strained their finances.
If Chancellor Rachel Reeves raises employment-related taxes again, business groups say it could “damage the government’s mission to drive economic growth and control inflation.”
Almost half of small and medium-sized businesses (49 per cent) said they would raise prices if employment costs increase, while 33 per cent said they would delay hiring and 24 per cent would consider redundancies, according to Employment Hero’s findings.
The report also noted that many small firms are still recovering from the effects of Reeves’s first Budget last year, which 72 per cent of leaders said negatively impacted their business.
Despite these concerns, Employment Hero’s data showed signs of resilience in the UK labour market, with employment rising 2.3 per cent month-on-month in October and up 1.9 per cent year-on-year.
Kevin Fitzgerald, UK managing director at Employment Hero, said the government must learn from past mistakes.
“When you tax small businesses, you tax everyone,” he said. “Higher costs lead to higher prices, fewer jobs, and less money in people’s pockets.”
Fitzgerald argued that SMEs — which employ the majority of the UK workforce — are key to reviving growth and tackling inflation.
“The Autumn Budget is an opportunity to show small firms that the government understands their role in the economy,” he said. “If ministers want to keep Britain working, they need to back small businesses — not burden them.”
Business leaders across the UK are pressing the Treasury to avoid further tax increases on employment and investment when Reeves delivers her Budget later this month.
Many fear that another round of tax hikes could fuel inflation, stunt job creation, and undermine confidence among smaller firms that are already contending with higher wage costs, energy prices, and borrowing rates.
With the Budget expected to focus heavily on fiscal tightening to fill a multi-billion-pound deficit, industry figures warn that punishing small firms could prove counterproductive — dampening growth at the very moment the government is seeking to reignite it.
Read more:
Business leaders warn Budget tax hikes could trigger higher prices

The government has launched a major review into youth unemployment, tasking former Labour health secretary Alan Milburn with investigating the growing role of mental health and disability in the rise of economically inactive young people.
Nearly one million people aged 16 to 24 in the UK are currently not in education, employment or training (Neets) — a figure that has alarmed ministers and policymakers. Milburn’s review will explore how to prevent young people from becoming trapped outside work or education, with findings expected to be published next summer.
The announcement comes just days after the Mayfield Review, led by former John Lewis chairman Sir Charlie Mayfield, warned that “young adults” aged 16 to 34 were at the heart of Britain’s “economic inactivity crisis”. His report found that the number of 16- to 34-year-olds who are long-term sick and inactive due to mental health conditions has risen by 190,000 since 2019, a jump of 75 per cent.
Launching the review, Pat McFadden, the work and pensions secretary, said the UK faced a “crisis of opportunity” among its younger generation.
“We cannot afford to lose a generation of young people to a life on benefits, with no work prospects and not enough hope,” he said. “This demands more action to give them the chance to learn or earn.”
The government is expected to unveil a “youth guarantee” in this month’s Budget — a policy that would promise paid work to young people who have been on universal credit for 18 months or more without finding employment or education.
The Department for Work and Pensions said Milburn’s review would make “practical recommendations” to help young people with health conditions access training, education or jobs, “ensuring they are supported to thrive, not sidelined.”
The initiative comes amid a series of government efforts to tackle long-term sickness and economic inactivity. It follows the Timms Review, which is currently examining personal independence payments (PIP) — the benefit covering the extra costs of physical and mental disabilities.
Milburn, who served as health secretary from 1999 to 2003 under Tony Blair and now acts as the lead non-executive director at the Department of Health and Social Care, said his review would be “uncompromising in exposing failures” across employment, education and welfare systems.
“I will produce far-reaching recommendations for change to enhance opportunities for young people to learn and earn,” he said.
The surge in young people unable to work due to mental health problems has become one of the most pressing challenges facing the government. Economists warn that rising inactivity is eroding productivity and weighing on growth.
While successive governments have published reports diagnosing the problem, few have managed to reverse the trend. Critics say underfunded mental health services, combined with the pressures of insecure work and high living costs, have created a generation increasingly detached from the labour market.
Milburn’s findings are expected to feed directly into Rachel Reeves’s forthcoming Budget, which will include new spending pledges aimed at reducing inactivity and boosting youth employment.
The hope in Whitehall is that this review — combining insight from both the health and work sectors — will finally produce a joined-up plan to bring Britain’s lost young workers back into the economy.
Read more:
Alan Milburn to lead review into mental health’s role in youth unemployment

More than 100 jobs are at risk at Aston Martin’s St Athan plant in the Vale of Glamorgan, as the luxury carmaker grapples with US trade tariffs and falling demand from China.
The company, which began production at its Welsh site in 2019, confirmed that staff consultations are under way but said no final decision on redundancies has yet been made.
Aston Martin said the planned measures were part of efforts to “strengthen the business in response to continued challenges in the global macroeconomic environment.” The firm added that the proposals could affect “contractor, fixed-term and permanent roles.”
Union leaders described the situation as “devastating”. Andrew Pearson, regional officer for Unite, said the union would begin consultation talks with the company in an effort to mitigate job losses.
The company’s shares have tumbled over the past year as it struggles with weaker demand across key international markets. Aston Martin recently warned that it could lose £110 million this year due to the “global macroeconomic environment.”
The St Athan site has already seen job cuts this year. In February, Aston Martin confirmed that 170 roles were being axed as part of a broader cost-saving drive.
Production jobs are expected to be most affected in the latest round of potential cuts, along with a number of contractor positions, according to BBC Wales.
The Welsh government said it was in contact with Aston Martin and stood ready to support affected employees.
“We are prepared to work with the company to offer support to workers following the outcome of the consultation,” a spokesperson said.
The St Athan plant, built on the site of a former RAF base, was seen as a key pillar of Aston Martin’s expansion when it opened in 2019. It employs several hundred staff and was originally intended to produce the company’s first SUV, the DBX, and future electric models.
Now, as economic pressures mount and global trade tensions bite, the future of that investment — and the jobs it brought to south Wales — hangs in the balance.
Read more:
More than 100 Aston Martin jobs at risk in Wales amid global slowdown

The horse-racing industry is bracing for a £10 million rise in costs after being excluded from new business rate reliefs due to come into force next April — a move that coincides with fears of a fresh tax raid on betting in the upcoming Budget.
According to research by Colliers, racing yards are among several categories that will lose access to the current 40 per cent rates relief, facing average increases of more than £7,000 per yard — equivalent to a 40 per cent rise in total business rate bills across the sector.
The property consultancy estimates that around 300 training yards, covering about 90 per cent of the sector, currently benefit from the relief but will now be left out of the new system, which will apply only to venues “wholly or mainly” used for retail, hospitality, or leisure activities provided to the public.
The National Trainers Federation and the British Horseracing Authority (BHA) have begun working together to alert members to the changes and lobby for clarity ahead of the November 26 Budget.
The Treasury’s overhaul is part of its wider plan to make the business rates system “fairer and fit for the 21st century”, with permanent lower multipliers for smaller retail, hospitality and leisure premises with rateable values under £500,000.
However, this lower rate will be funded by a higher multiplier for all other commercial properties — including racing yards, laboratories, and large-scale facilities — when the new system takes effect from April 2026.
John Webber, head of business rates at Colliers, warned that many trainers could struggle to absorb the extra burden: “Trainers work on small margins and employ many people on low wages. The rise in employer National Insurance contributions and the national minimum wage has already hit them hard. To add increased business rates on top could push some over the edge.”
He added that while the Treasury’s relief plan was designed to support the high street, its exclusion of the horse-racing and betting industries risked “further damage to struggling local economies.”
The reform will also affect more than 6,000 betting shops, which Colliers estimates could collectively pay an additional £10 million a year in business rates compared to similar-sized retail outlets that qualify for relief.
The betting sector is already under pressure amid speculation that Chancellor Rachel Reeves will raise gambling duties in the Budget later this month — a move that industry bodies have warned could lead to widespread betting shop closures.
“Taxing the betting industry will not help the high street — it will only lead to more empty shops,” Webber said. “And the knock-on effects are significant: less money for bookmakers means less money flowing back into British horseracing.”
A Treasury spokesperson said the new system would make rates fairer overall, introducing lower rates for most retail, hospitality and leisure businesses while applying a higher charge to less than 1 per cent of high-value commercial properties.
“We’re making business rates fairer by introducing permanently lower rates for retail, hospitality and leisure from April, funded by a higher rate on the most valuable business properties,” the spokesperson said.
They added that the government remained committed to supporting the UK’s business environment: “We’ve capped corporation tax at 25 per cent — the lowest in the G7 — secured major trade deals with the US, EU and India, and seen interest rates cut five times since the election to help businesses across Britain.”
Treasury sources also stressed that the department “understands horseracing is part of the cultural fabric of the country” and has no plans to change the tax treatment of racecourse betting, which remains exempt from duty.
The horse-racing sector — which supports more than 85,000 jobs and contributes around £4.1 billion annually to the UK economy — now faces dual headwinds from both the rates overhaul and a potential betting levy increase.
Industry leaders warn that without targeted support, smaller yards and rural racing operations could face closures, dealing a further blow to Britain’s standing as a global centre of equine sport.
Read more:
Horse-racing industry faces £10m blow from business rates overhaul

The Conservative Party has pledged to scrap mandatory climate and sustainability reporting requirements and rein in regulators “with a tendency to go woke” in a dramatic effort to boost the number of companies listing on the London Stock Exchange.
Andrew Griffith, the shadow business and trade secretary, said that if the Tories win the next general election, they will “take a chainsaw” to the layers of green and social disclosure rules that have, in his words, “made British businesses less competitive and less agile.”
“If you care about the competitiveness of the UK, someone has to take a proper chainsaw to the volume of these extra reports. And that someone is going to be us,” Griffith said.
The plans mark one of the most radical proposed rollbacks of corporate regulation in recent years — and signal a sharp shift from the Labour government’s focus on green finance and ESG transparency.
Under the Conservatives’ proposals, mandatory ESG disclosures, including a company’s carbon footprint, diversity metrics and social governance data, would be made voluntary once again.
ESG rules were initially introduced as a voluntary standard, allowing firms to demonstrate transparency around sustainability, workplace culture and board governance. Over the past decade, however, the measures have evolved into complex mandatory frameworks administered by regulators such as the Financial Conduct Authority (FCA), HMRC, and Companies House.
According to government figures, compliance costs have spiralled, with businesses spending around £202 million annually on climate-related financial disclosures, plus an additional £100 million on energy savings and carbon reporting.
A KPMG study found the average sustainability report now runs to 83 pages, up from 70 pages in 2021, with some reports exceeding 200 pages.
“Some of our best firms are hamstrung by having to report against a dense thicket of ESG metrics, to be judged by self-appointed activists or regulators,” Griffith said.
Griffith said the Conservatives would also move to curb the powers of regulators, particularly where ESG requirements are seen as political or subjective.
He argued that excessive reporting and regulation had driven businesses away from London, citing rival financial centres such as New York and Singapore as jurisdictions with fewer disclosure burdens.
“The countries we’re losing listings to don’t have anything like this kind of onerous reporting,” Griffith said. “There’s no point in us being an outlier.”
In the US, Donald Trump’s administration previously scrapped federal ESG reporting mandates, a move that the Conservatives see as a precedent for deregulation in the UK.
The policy forms part of a wider Conservative strategy to revive London’s global competitiveness as a listings destination and signal a more pro-business, low-regulation environment.
Alongside the ESG rollback, Griffith said a future Tory government would also scrap stamp duty on home purchases, reverse Labour’s inheritance tax changes for family businesses, and review regulations that have contributed to so-called “de-banking” — where business or personal accounts are closed due to reputational or ESG-related concerns.
“Our proposals will defend freedom of expression and ensure that businesses can access banking facilities without running the gauntlet of woke middle managers trying to second-guess subjective ESG rules,” he said.
While the Conservatives argue the plans would cut red tape and encourage growth, critics warn that scrapping ESG requirements could damage Britain’s reputation among international investors and sustainability-focused funds.
Large institutional investors — including BlackRock, Aviva, and Legal & General — have said ESG disclosure remains a “core component of modern corporate accountability”, with transparency on environmental and social risk now seen as standard by global markets.
However, Griffith dismissed concerns that deregulation would allow companies to “dodge” climate commitments.
“I don’t think so,” he said. “Companies are still on the hook to shareholders for whatever they say. They will continue to act responsibly without the state micromanaging every report.”
The remarks come amid growing unease in the City about London’s ability to attract large listings, following high-profile defections such as Arm Holdings’ US float last year.
With business investment lagging and the UK’s regulatory environment seen as increasingly complex, the Conservatives are attempting to position themselves as the party of deregulation and growth, contrasting Labour’s emphasis on climate accountability and corporate transparency.
Whether the proposed ESG rollback would materially boost listings remains uncertain. Analysts warn that investor sentiment, market liquidity and geopolitical stability remain far greater influences than disclosure rules alone.
Read more:
Tories vow to ‘take a chainsaw’ to ESG rules to boost London listings

When Jonathan Reynolds announced sweeping tariffs this summer to shield Britain’s steelmakers from a flood of cheap imports, the reaction seemed almost universally positive.
“This government is unapologetic in our support for the UK steel sector,” declared Reynolds, then business secretary, promising to defend a “vital industry that underpins Britain’s industrial strength and national security.”
Gareth Stace, director-general of the industry body UK Steel, hailed it as “a tremendous outcome” that would stop foreign producers from “swamping the UK and driving our steel manufacturers out of business.”
But behind the scenes, the glow of unity quickly dimmed. Letters, emails and board minutes seen by The Sunday Times reveal an industry at war with itself — with primary steelmakers and smaller manufacturers accusing one another of self-interest as tariffs reshape Britain’s metal economy.
On one side stand the primary steel producers: heavyweights such as Tata Steel, British Steel, Celsa and Speciality Steel, which collectively employ about 10,000 workers and produce semi-finished materials like billets, slabs and blooms. They argue that protection is essential to defend British manufacturing from state-subsidised steel from Asia, particularly China.
On the other side are the “downstream” steel users — the firms that take these semi-finished products and turn them into everything from metal washers and car parts to construction mesh and polished kitchen counters. Together they support more than 300,000 jobs, and they say the new tariffs are pushing them to the brink.
Their case is simple: by making imported steel more expensive, the government is driving up their costs — in some cases to the point where manufacturing in Britain no longer makes economic sense.
“British steelmakers are deliberately and consciously seeking to damage downstream businesses, even though some are their customers,” said Stephen Morley, president of the Confederation of British Metalforming (CBM), which represents 200 firms employing 70,000 people.
Morley and a coalition of downstream trade bodies — including the British Constructional Steelwork Association, British Stainless Steel Association, and International Steel Trade Association (Ista) — claim the government’s decision was heavily influenced by Tata Steel, the Indian conglomerate that owns the Port Talbot steelworks in south Wales.
In a letter to trade minister Chris McDonald, Morley alleged that former business secretary Reynolds had acted after Tata “held a gun to the government’s head,” threatening to withdraw from its £1.25 billion plan to switch from coal-fired blast furnaces to cleaner electric arc furnaces unless stronger import protections were introduced.
Tata declined to comment, but UK Steel insists that protectionism is necessary given the “existential threat” posed by Chinese overproduction and the re-routing of exports through Vietnam and South Korea to avoid anti-dumping rules.
“We have to implement broader import controls,” said Peter Brennan, UK Steel’s director of trade and economic policy. “That’s what the US has done. That’s what the EU is doing. If we don’t, we’ll lose our steel industry.”
Downstream companies warn the consequences could ripple through construction, manufacturing and infrastructure. Britain simply doesn’t make enough steel to meet demand, forcing firms to import — now at inflated prices.
Richard Webster, chair of the British Independent Reinforcement Fabricators Association, said the UK produces only about 600,000 tonnes of steel reinforcement bars a year, far short of the 1.1 million tonnes needed for projects like housing and rail.
“Imports play a crucial role in keeping supply flowing to the construction industry,” he wrote to trade secretary Peter Kyle. “Tariffs could slow projects and undermine Labour’s growth ambitions.”
Simone Draper of Ista added that the changes had already caused “disruption and unexpected costs across the supply chain.”
There is growing fear that further tariff hikes — such as the EU’s planned 50 per cent levy and halving of tariff-free quotas due next year — could “strangle the metal manufacturing supply chain”, in Morley’s words.
Many companies sit uneasily between the two sides. Philip Jackson, managing director of Bright Steels in North Yorkshire, said his business both suffers from cheap imports and depends on them.
“A one-dimensional approach on safeguarding will penalise us,” he said. “We need a balanced policy that supports domestic producers without crippling the rest of the chain.”
To find that balance, Kyle has commissioned engineering consultancy Hatch to map Britain’s steel production capacity and demand over the next 25 years — an attempt to identify which products could be tariff-free without undermining UK mills.
For some in the industry, the stakes are more tangible than trade statistics. Kirsty Davies-Chinnock, a stainless steel specialist in the West Midlands, says tariffs threaten the invisible infrastructure that underpins daily life.
“Everyone in the UK comes into contact with my products at least 30 times a day,” she said. “From turning on a light switch to taking a vitamin, having a cup of coffee — right through to falling out of a nightclub at 3am and being handed a kebab over a polished stainless steel counter. You take that away, and you can’t have your coffee, your vitamins — or your kebab.”
It’s a vivid reminder that in the civil war tearing through British steel, it isn’t just furnaces and factories at stake — it’s the thousands of small businesses, builders, and manufacturers that rely on them every day.
Read more:
Jobs and kebabs on the line as UK steel sector turns on itself over import tariffs

Let’s get one thing straight: I’m not usually in the business of tutting at shoes. I’m not the keeper of the brogue, nor the patron saint of patent leather.
But when a man hosts a dinner at his own three-Michelin-starred restaurant to celebrate the newly knighted Sir David Beckham, and turns up in a tuxedo paired with gleaming white trainers — well, I start to wonder if the world hasn’t finally gone mad.
Now, of course, Gordon Ramsay owns the place. If anyone can decide the dress code at a table of his own, it’s the chef-proprietor himself. He can serve pigeon in a paddling pool and wear pyjamas if he likes. But ownership doesn’t equal immunity from taste. There’s a line between “relaxed contemporary cool” and “I’ve given up”. And I’m afraid, Gordon, that night you were teetering perilously close to the latter — in trainers, no less.
What made the spectacle even starker was the company. This wasn’t a boozy mates-only dinner down the King’s Road. It was a black-tie celebration for Beckham’s knighthood — the culmination of a decades-long campaign of service, brand management and quiet self-reinvention. And Sir David, to his eternal credit, turned up looking like a walking Bond franchise: the tux razor-sharp, the shoes mirror-bright, posture immaculate. Even, the now Lady Victoria, never knowingly underdressed, embodied old-school grace. Around the table, guests glimmered in black and silk, the dining room itself a temple of fine formality. Then there was Gordon,  beaming proudly, I’m sure for pone of his closest friends, but looking as if he’d dashed straight from the pass to the party without time to lace up.
Let’s not kid ourselves: trainers with a tux aren’t a bold fashion statement anymore. They’re the lazy man’s rebellion, the sartorial equivalent of mumbling at a job interview. Once upon a time, it was rock stars and artists who broke the rules; now it’s millionaires pretending to be effortless. And in the hallowed dining room of Restaurant Gordon Ramsay, where the sauces are reduced to the millisecond and the tablecloths are ironed flatter than the M25, that nonchalance rings hollow.
There’s an old idea that what you wear to dinner says something about how seriously you take the company you’re in. Dress up for the people you respect. Make an effort for the moment. And when that moment is the knighthood of one of Britain’s most famous men, perhaps a pair of Oxfords wouldn’t kill you. Beckham understood that instinctively. Ramsay, alas, looked like he’d mistaken “three-star” for “street-food pop-up”.
I’m not saying we should all resurrect the tailcoat. God knows no one needs more starch in their life. But some occasions, and this was one, still deserve their sense of ceremony. A knighthood isn’t just a social media milestone. It’s the country tipping its hat to a lifetime of excellence, captaining of England, his involvement in the 2012 London Olympics and numerous charities including His Majesty’s Kings Trust (formerly the Princes Trust). The dinner that follows should match that spirit of reverence. If the chef-host can’t be bothered to put on proper shoes, why should anyone else bother to polish their manners?
Of course, Ramsay might argue that he’s a man of modern tastes, that the Michelin world needs loosening up, that formality is for dinosaurs. Maybe. But there’s a world of difference between evolution and erosion. When everything becomes casual, nothing feels special. And part of the allure of fine dining — and indeed of honours, titles, rituals — is that they are special. That they demand something extra of us. A little theatre. A little respect. A little polish.
The irony is that Ramsay, of all people, understands precision. His entire empire is built on it — on the poise of a sauce, the placement of a garnish, the glint of a knife. He’ll bark at a chef for an overcooked scallop, but when it comes to footwear, apparently anything goes. Perhaps he thought the trainers were a cheeky modern touch, a wink to contemporary cool. But against the tableau of gleaming glassware, bow-tied guests and Beckham’s effortless suavity, it just looked … off. Like ketchup on foie gras.
Then again, maybe that’s the point. Maybe Ramsay wanted to telegraph that fine dining is evolving — that even at its summit, the rules are ready to bend. But there’s a danger in bending them too far. Because when even the guardians of refinement decide that effort is optional, the very idea of “special” starts to crumble. And if there’s anywhere that should still demand a bit of theatre,  a bit of occasion,  it’s the dining room of a three-star restaurant celebrating a newly minted knight of the realm.
In the end, this isn’t really about shoes. It’s about symbolism. The Michelin stars, the knighthood, the restaurant, the clothes, all of it speaks a shared language of aspiration. And in that language, trainers say something else entirely. They say: I don’t care that much. And perhaps that’s fine if you’re catching a flight or popping to Waitrose. But when you’re toasting Sir David Beckham under chandeliers, it feels just a bit … cheap.
So, Gordon — you own the restaurant, the name, and the night. But sometimes ownership carries responsibility. And on this occasion, when everyone else rose to meet the grandeur of the moment, your shoes let the side down. The food was I am sure was flawless, the wine divine, the conversation sparkling. But those trainers? They were the only thing in the room that didn’t quite fit.
Read more:
Sorry Gordon, whilst you own the restaurant, but trainers with a tux? really?

Rachel Reeves is considering a pay-per-mile tax on electric vehicles (EVs) as part of her forthcoming Budget, in a move that could raise hundreds of millions of pounds a year and help offset the sharp decline in fuel duty revenues caused by Britain’s shift to greener transport.
The proposed levy, expected to feature in the 26 November Budget, would see EV drivers charged around 3p per mile, adding an average of £250 a year to running costs. The new duty would sit alongside existing road taxes, which electric vehicle owners became liable for from April this year.
A government spokesperson said the move was designed to make motoring taxation “fairer for all drivers”, noting that petrol and diesel motorists currently pay around £600 annually in fuel duty while EV owners pay none. “Fuel duty covers petrol and diesel, but there’s no equivalent for electric vehicles. We want a fairer system for all drivers,” the spokesperson said.
The proposed pay-per-mile charge is being considered as part of the Chancellor’s efforts to fill a £20–30 billion fiscal gap over the remainder of the Parliament. According to the Daily Telegraph, which first reported the plan, the system would be introduced in 2028, following a public consultation.
By then, around four million Britons are expected to drive electric cars or vans, according to the Society of Motor Manufacturers and Traders (SMMT). The trade body, however, warned that the measure could undermine the UK’s fragile EV transition.
“We recognise the need for a new approach to motoring taxes,” the SMMT said, “but at such a pivotal moment in the UK’s EV transition, this would be entirely the wrong measure at the wrong time.”
Jon Lawes, managing director at Novuna Vehicle Solutions, said that while a fairer tax system was inevitable, affordability and infrastructure should take priority. “The cost of EVs and charging availability remain major barriers,” he said, urging the government to accelerate charger deployment, extend grants, and boost incentives for used EVs.
The government has already invested £4 billion to support the transition to electric vehicles, including grants worth up to £3,750 per vehicle. But the Chancellor faces growing pressure to broaden the tax base as fuel duty receipts decline, with analysts estimating the Treasury could lose more than £25 billion annually by the early 2030s as the combustion fleet shrinks.
Policy analysts say the pay-per-mile scheme would mark a significant shift in transport taxation, replacing fuel-based levies with usage-based charges. The Campaign for Better Transport and the Tony Blair Institute have both called for road pricing in recent years, suggesting a 1p-per-mile charge for cars and vans and up to 4p for heavy goods vehicles.
Even with a 3p charge, analysis by the Energy and Climate Intelligence Unit suggests that EVs would remain around £1,000 cheaper per year to run than petrol vehicles.
“This announcement comes shortly after the government weakened its EV sales targets under industry pressure,” said Colin Walker, the unit’s head of transport. “That could allow more hybrids on the road that burn five times more fuel than advertised, costing drivers hundreds more a year.”
Treasury insiders have framed the proposal as a matter of fairness rather than revenue-raising, but its timing — as Labour prepares a tax-heavy second Budget — underscores the government’s growing dilemma: how to fund Britain’s transition to net zero without stalling public adoption of clean technologies.
As Reeves finalises her Budget, the EV tax debate will test Labour’s ability to balance fiscal discipline, industrial policy, and environmental ambition — a triad that could define the economic tone of the new government.
Read more:
Rachel Reeves considers pay-per-mile tax on electric vehicles to plug £30bn fiscal gap

The government has clawed back £74 million from private firms accused of making “excessive profits” under multi-billion-pound asylum accommodation contracts — a figure that amounts to a tiny fraction of the £2.1 billion annual cost to taxpayers.
The Home Office confirmed it had recovered the funds following a review into contracts covering more than 200 hotels housing around 32,000 asylum seekers across the UK. The investigation found several suppliers had breached profit thresholds agreed under their long-term deals to provide accommodation for migrants.
However, the sum recovered is just 3.5% of the department’s total asylum accommodation spend for 2024/25, which averages £5.77 million per day, fuelling renewed criticism from MPs who accuse ministers of losing control of costs and contracts.
In a damning assessment, the Commons Home Affairs Select Committee said the Home Office had “squandered billions” on migrant hotels and presided over a “failed, chaotic and expensive” system. The report said there had been a “manifest failure” to manage contracts with private companies, allowing them to make excessive profits from the Channel crisis.
The committee’s Conservative chair, Dame Karen Bradley, welcomed the recovery of £74 million but described it as “only a first step”.
“This is only a small part of the many billions that the contracts have and will cost,” she said. “The government must now set out its long-term plan for delivering a resilient and cost-effective asylum accommodation system.”
MPs also criticised the Home Office for failing to require providers to assess the impact on local communities before opening hotels, saying the decision had placed unsustainable pressure on local services and damaged public trust.
The Home Office is currently supporting 103,000 migrants at the taxpayer’s expense, including those in hotels, dispersal accommodation and private flats. Average hotel accommodation costs £144.98 per person per night, compared with just £23.25 for dispersal housing.
While costs have fallen from £3 billion in 2023/24 to £2.1 billion this year — partly through the use of cheaper accommodation and room-sharing — MPs say billions have already been lost to poor oversight.
Home Secretary Shabana Mahmood said the government had inherited “asylum hotel contracts that were not delivering good value for taxpayers’ money” but stressed that reforms were under way.
“We have already saved £700 million in hotel costs. Now we are recouping millions more in excess profits. And by the end of this Parliament, we will have closed every asylum hotel,” she said.
The 10-year contracts, signed in 2019 with three private providers, were designed to give the government long-term capacity to manage asylum accommodation across the UK. But after years of spiralling demand and emergency hotel use, ministers are now facing renewed pressure to overhaul the system — with MPs warning that, without deeper reform, taxpayers will continue footing an “unsustainable” bill.
Read more:
Government recoups £74m from asylum accommodation firms amid criticism over ‘chaotic’ hotel contracts