Rachel Reeves is set to unveil a package of measures aimed at alleviating the cost-of-living crisis, including cuts to import tariffs that could reduce prices on everyday items like biscuits and chocolate. The Chancellor's proposals are expected to save consumers over £150 million annually through tariff reductions on more than 100 product types.
Further initiatives include a "Great British Summer Savings" scheme, which will offer free bus travel for children across England during the August school holidays. Ms Reeves is scheduled to detail these policies in the Commons on Thursday, addressing the economic pressures exacerbated by Donald Trump's war in the Middle East.
However, immediate assistance for soaring energy bills is not anticipated. The household energy price cap is projected to increase by £209 a year from July, a consequence of global oil and gas price hikes following the closure of the Strait of Hormuz.
Details of the Plan
While Ms Reeves may outline contingency plans, a comprehensive package of targeted support for households during the winter months, when energy consumption peaks, is not expected until September. The plan to suspend tariffs on some food imports is part of the Government's wider effort to combat rising prices.
The full list of products will be published next week but is expected to include biscuits, chocolate, dried fruit and nuts.
Prime Minister Sir Keir Starmer said: "We know many hard-working families are still feeling the squeeze and too often think they have to hold back. By giving every child free bus travel throughout August and cutting tariffs on everyday food items, we're putting money back into people's pockets and making life that bit easier. This government is focused on practical steps that help right now — easing pressure on household budgets, supporting parents during the school holidays, and backing British businesses."
The free bus travel scheme will allow every child aged five to 15 in England to travel on participating local routes. The Chancellor is committing more than £100 million to fund the free fares scheme and to support bus services facing increased costs.
Chancellor's Commitment
Ms Reeves said: "My number one priority is protecting households from rising costs. This summer I want every family to be able to enjoy themselves, that's why we're launching the Great British Summer Savings Scheme, and why we're helping kids with free bus travel throughout August. As the war in Iran pushes prices up at home, my economic plan is the right one. I will continue to make the right choices, to protect households and businesses, and build a stronger and more secure Britain."
The latest package comes after the Government announced an extension of the 5p cut in fuel duty until the end of the year, along with a tax break for hauliers and help with red diesel costs for farmers.
Economic Context
The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation fell to 2.8% in April, down from 3.3% in March – and the lowest level since March 2025. But this was largely driven by regulator Ofgem lowering the energy price cap from the start of April by 7%, or £10 a month, for the average household using both electricity and gas, which was pushed down by Government measures to reduce bills.
Inflation is expected to surge back up as the conflict in the Middle East has sent fuel prices soaring and the energy price cap is expected to increase significantly from July when it is next updated. Energy analyst Cornwall Insight's prediction for Ofgem's cap from July to September now stands at £1,850 for a typical dual fuel household, an increase of 13% on April's £1,641 annual cap.
Ministers are wary of a Liz Truss-style universal bailout for all households, warning that unfunded giveaways could trigger an increase in government borrowing costs and inflation, feeding through to higher mortgage rates, which would end up leaving people worse off.
