Keir Starmer has announced an extension to the temporary 5p cut in fuel duty, scrapping a planned increase that was due to take effect in September. The Prime Minister told the Commons the move was a necessary response to cost-of-living pressures, exacerbated by rising fuel prices linked to the US-Israeli attack on Iran.
The decision, confirmed during Prime Minister's Questions, also includes a 12-month vehicle tax holiday for the haulage industry. Starmer said the measures were possible due to the Chancellor's stewardship of the economy, which he claimed had made Britain the fastest-growing economy in the G7. Rachel Reeves is expected to set out further details on Thursday.
The cost of the package, which postpones the 5p rise and includes a discount on red diesel duty, is estimated at around £400 million. The Treasury has not clarified whether the full 5p increase will go ahead in January, stating that timing will be announced at the autumn budget.
Responding for the Conservatives, Kemi Badenoch claimed credit for the U-turn, but Starmer rejected this, attributing the decision to the situation in Iran. He said the freeze would protect working people, adding: 'This is not our war.'
The Treasury said the freeze would save the average driver £120 over two years, while the vehicle excise duty pause would save £600 for a typical heavy lorry. Chancellor Reeves stated: 'The war in Iran is pushing up fuel prices... I am stepping in to protect people at the pump.'
