Mobiles could still be used for payment when the vehicle is stationary, such as at a drive-through takeaway.
However, ministers looking into the changes have rejected further calls to ban hands-free tools on cars.
It has been illegal to make a call, text and email when driving since 2003, but using a phone for things like filming, taking photos and scrolling through a music playlist were all still ok because they weren't "interactive communication".
"We welcome the Transport Select Committee's report, and share their drive to make our roads even safer which is why this review will look to tighten up the existing law to bring it into the 21st century, preventing reckless driving and reduce accidents on our roads".
"It's confusing and unsafe and for a very long time risky drivers have escaped punishment, but this update means those who do wrong will face the full force of the law".
The change in law would apply across Britain and is expected to come into effect early next year, depending on the outcome of the consultation.
The use of mobile phones while driving causes four types of mutually non-exclusive distractions - visual, auditory, cognitive and manual/physical.
In 2019, there were 637 casualties on Britain's roads - including 18 deaths and 135 serious injuries - in crashes where a driver using a mobile was a contributory factor.
People using a hand-held mobile phone in all circumstances while driving will be breaking the law, under new government plans unveiled by Roads Minister Baroness Vere today (17 October 2020) to close a legislation loophole and improve road safety.
In 2017, police forces launched a series of campaigns to stop young motorists from taking pictures of selfies while driving.
United Kingdom lawmakers have finally made it illegal to use a mobile phone at all while driving. When enacted, you'll have to use hands-free features for just about everything.
Some 662 phone interactions were observed, of which only 38 were completely hands-free. At 30mph, a auto travels 100 feet in 2.3 seconds - meaning even a split-second lapse from changing a song on a playlist or checking an app could result in a crash.
National Police Chiefs' Council lead for Roads Policing, Chief Constable Anthony Bangham, said: "Using a mobile phone while driving is incredibly unsafe and being distracted at the wheel can change lives forever".
"That's why we want to further strengthen the law to use a hand-held phone while driving illegally in a wide range of situations".
It has been established that distraction caused by mobile phone usage while driving, can deprecate driving performance, for instance increasing reaction time and increasing frequency of lane change.