Starmer’s cost-of-living adviser calls for fuel duty cut extension
Starmer’s cost-of-living adviser calls for fuel duty cut extension
Political pressure mounts as oil prices surge due to Middle East tensions
Following a significant rise in petrol prices linked to the conflict between the US and Israel with Iran, the Labour Party’s cost-of-living advisor has urged the government to extend the current fuel duty reduction. Lord Walker, a Labour peer and chair of Iceland supermarkets, emphasized the need for continued support beyond the September deadline, which marks the end of the 5p per litre cut introduced by the previous Conservative administration.
“Given the current situation, we must consider extending or broadening the fuel duty reduction,” Walker stated during an interview with BBC Radio 4’s Today programme.
The tax relief, initially implemented in 2022 amid the Russia-Ukraine war, has been a key measure to ease financial strain. However, recent disruptions in the Strait of Hormuz—where Iran’s actions have impacted global oil flow—have reignited concerns about soaring fuel costs. Approximately 20% of the world’s oil and gas transit through this critical waterway, exacerbating price volatility.
Global responses to energy crisis
As the Middle East conflict intensifies, nations are adopting varied strategies to manage the energy crisis. Ireland has lowered petrol and diesel taxes, Australia has temporarily halved fuel duty for three months, and Slovenia has introduced fuel rationing, becoming the first EU country to do so. Meanwhile, Egypt has mandated early closures for businesses to reduce energy consumption.
Political debate over fuel duty policy
Labour’s leader, Sir Keir Starmer, has acknowledged the need to monitor the impact of the Iran conflict on fuel prices, though he has yet to confirm extending the tax cut. Chancellor Rachel Reeves highlighted the government’s focus on targeting support for those most affected by energy costs, including a new energy cap effective from April 1.
Despite this, forecasts indicate energy bills will rise sharply in July, driven by escalating oil prices. Critics argue the freeze on fuel duty until September may not be sufficient, with opposition parties pushing for immediate action. Reform UK, the Conservatives, and the Liberal Democrats have all advocated for maintaining the cut, while Liberal Democrat leader Sir Ed Davey called for an emergency 10p reduction. Reform’s Robert Jenrick also proposed halving VAT on petrol for three months.
Meanwhile, the Green Party warned of potential £300 household energy bill increases, and the SNP urged devolving energy policy to Scotland. Plaid Cymru suggested investing in renewables to mitigate future price spikes. The debate underscores the growing pressure on policymakers to address rising living costs amid global instability.
