Budget 2026: Calls to reduce fuel costs and help the high street

The Chancellor John Healey has promised to give people "breathing space" from cost of living pressures in his first Budget.

In East Grinstead in West Sussex, several people told the BBC they were feeling squeezed, ahead of Wednesday's announcement.

Taxi driver Stephen Payne said the cost of diesel was putting pressure on his income as it was "going up every day".

He said he is now having to do "four or five big jobs" to cover the cost of fuel before he earns any profit, while the cost of his everyday essentials were also going up.

Payne said the firm he works for, Evo Taxis, could not raise prices to compensate because "people haven't got the money these days" and "won't use us if we keep putting the prices up".

According to the RAC, diesel hit a record high of more than £2 a litre in October after conflict in the Middle East pushed up prices.

Fuel duty, which is usually set at the budget, has been frozen at 53p a litre since March 2022 but is due to rise on 1 January 2027.

Payne said he did not think the increase should go ahead and wanted the government to "sort something out" to ease financial pressures on people more generally.

The Treasury has not indicated what will happen to fuel duty rates but earlier announced measures which it called "everyday fixes" to allow people to keep claiming higher mileage rates when they drive for work and to cut import tariffs on certain foods.

Craig Cash has run Herbert Sports on High Street for the last 27 years, after starting there as a Saturday worker four decades ago.

He said a "lot of factors" including lack of footfall and the rise of people shopping online, particularly young people, had made retail "very hard".

Cash said the last two years had been particularly difficult financially and pointed to rising costs, including the increase to the national minimum wage.

"I've been through recessions, I've seen that and this is getting to be the worst I've known," he said.

"Personally, I've had to take a pay cut to help balance the books. I've put in a cash injection through the quiet months just to get you through and that was never ever a thing."

The government has said it wants to make helping the high street a priority and The Times has reported that the Chancellor may change tax rules for big online platforms to fund a cut in business rates for high street retailers.

Cash said help of some kind was needed as retail was "on its knees".

The government has already announced it would cut business rates for pubs by a further 20% from April 2027.

Details of which venues will be eligible are expected in the Budget on Wednesday.

Jordan Cella took over as landlady of The Railway in East Grinstead in March 2025.

She said it was "all good saying it but it would be nice to hear what actually is going to come and how that will benefit us directly".

In the meantime, she said she would mainly be keeping an eye on what happens to staff bills and alcohol duty.

"We have introduced a lot of deals and we try to absorb a lot of the cost with alcohol duty in order to ensure we still have punters every day, but it is very difficult to compete with a supermarket that is able to have that bigger monopoly buying power, which, necessarily, we don't have," she said.

Business is booming for Kelly Jempson, who set up her line-dancing fitness classes 18 months ago.

"I originally started as just me with one hour a week where I just wanted to dance and if people wanted to dance with me then brilliant," she said.

Since then her business has grown rapidly and she now has 14 instructors teaching classes in more than a dozen locations across the South East.

As a single mum, she said she had noticed the cost of shopping and everyday living going up but said she would like the Chancellor to create more tax relief schemes for small businesses.

"I have learnt a lot about taxes recently as I have grown and expanded and I've always wanted to invest back into expanding more opportunities and new locations but obviously the more taxes I have to pay the less of the profits I am able to keep to then expand".

Any support the government chooses to give will be balanced against spending demands and high borrowing costs, according to The Resolution Foundation, which focuses on raising living standards.

Greg Thwaites, the think tank's Chief Economist, said "conflict in the Middle East and turbulence in the global bond markets" were "putting pressure on both the public finances and family finances".

He said the think tank's view was that any additional help should be "fully funded by small sensible tax rises".

The government has said it will stick to its 2024 manifesto promise not to raise income tax, national insurance or VAT.

An HM Treasury spokesperson said: "We know families are feeling the impact of higher prices, pushed up by conflicts overseas.

"The Chancellor is focused on giving households and businesses a bit of breathing space where we can.

"That's why we have removed VAT from electricity bills, capped bus fares in England at £2 in 2027, extended the 5p fuel duty cut, and frozen rail fares and prescription charges."

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