Chancellor says she will ‘keep a close eye’ on mileage rates for workers

UNISON members meet to lobby MPs on mileage rates in 2023

Today in parliament, chancellor Rachel Reeves confirmed that she is looking at out of date mileage rates and thanked UNISON for highlighting the issue.

Mileage rates, set by HMRC, have not been updated in fifteen years while fuel, insurance and other motoring costs have skyrocketed. These out of date mileage rates have been driving public service workers into poverty.

In the last fifteen years, the cost of living crisis and a decade of austerity saw wages failing to keep pace with prices. Out of date mileage rates have compounded this and many workers who have to use a car to do their jobs have felt like they were paying to go to work.

UNISON has been campaigning for rates to be reviewed for many years, and has lobbied MPs. General secretary Andrea Egan has also directly lobbied Rachel Reeves on this issue.

UNISON teamed up with the RAC Foundation to explore the scale of the problem and develop a model to establish what the rates should be had they kept pace with inflation. In 2023, the RAC Foundation announced that frontline workers who used their care for work were out of pocket by an average £6,000 a year.

One in five frontline public service workers is required to drive to do their job. They often drive significant distances and those clocking up the most miles can be left thousands of pounds out of pocket. UNISON’s data shows that the employees most out of pocket are often the lowest paid, especially those working in social care.

UNISON has been calling for the chancellor to ask HMRC to conduct a review of rates so that they reflect the real costs of using a car for work, and to commit to a quarterly review. It isn’t fair that ordinary workers are at the mercy of global events which push up prices at the pump.

Today’s news that Rachel Reeves has said “this is one area that I will be keeping a very close eye on” when she reviews taxes in future  means that UNISON members are one step closer to fairer mileage rates.

Watch the announcement on YouTube

In response to the announcement, UNISON assistant general secretary Jon Richards said: “Frozen mileage rates have shifted a heavy financial burden to workers for simply going about their jobs.

“Out of date rates are effectively a clumsy stealth tax caused by political inaction, at a time when workers are struggling with soaring cost of living pressures.

“People on the frontline in essential public services who have to use their own cars for work are thousands of pounds out of pocket.

“An increase in the rate is long overdue and urgently needed, so workers aren’t subsidising employers from their own pockets.

“It’s good the chancellor is listening and has taken the issue on board.”

Read: ‘Out of date mileage rates are driving workers into poverty’