Starmer’s cost-of-living adviser calls for fuel duty cut extension

Starmer’s cost-of-living adviser calls for fuel duty cut extension

Labour’s cost-of-living adviser, Lord Walker, has advocated for the prolongation of the existing fuel duty reduction, citing recent fluctuations in petrol prices driven by the US and Israel’s conflict with Iran. The 5p per litre cut, initially implemented by the previous Conservative administration in 2022 amid Russia’s invasion of Ukraine, is set to expire in September. Lord Walker urged policymakers to reconsider extending or expanding the measure, emphasizing the need for continued support amid rising costs.

“I think given where we are, we do need to be thinking and talking about extending it or enlarging it,” the Labour peer stated during an interview on BBC Radio 4’s Today programme.

The current surge in fuel prices follows Iran’s disruption of the Strait of Hormuz, a critical shipping route through which approximately one fifth of global oil and gas traffic flows. This has triggered renewed concerns about energy affordability, with Lord Walker highlighting Australia’s recent 14p per litre reduction as a potential model for the UK.

Meanwhile, the Labour government has introduced measures to mitigate energy costs, including a new energy cap effective from 1 April. However, forecasts suggest bills could rise significantly in July due to escalating oil prices. Chancellor Rachel Reeves has pledged to focus support on those most affected by higher heating oil costs.

“We have the right economic plan for a more volatile world, taking a responsible approach to supporting working people in the national interest,” said a Treasury spokesperson. “Fuel duty is frozen until September, and we’re enabling targeted support for those facing higher heating oil costs.”

Global Reactions to Energy Crisis

Other nations have also taken steps to address the Middle East-driven energy crisis. Ireland reduced petrol and diesel taxes, Australia temporarily halved fuel duty for three months, and Slovenia became the first EU country to introduce fuel rationing. In Egypt, businesses are being encouraged to cut energy usage by closing earlier.

Political Divisions Over Fuel Policy

Lord Walker’s suggestion has sparked debate among political parties. The Conservatives, Reform UK, and the Liberal Democrats have all argued that the fuel duty cut should remain in place beyond September to ease pressure on households. Kemi Badenoch, Conservative leader, warned of a potential “humiliating U-turn” for Sir Keir Starmer if the increase proceeds.

Liberal Democrat leader Sir Ed Davey proposed an immediate 10p cut, while Reform’s Robert Jenrick called for halving VAT on petrol for three months. The Green Party urged planning for potential energy bill increases of up to £300 per household. Meanwhile, the SNP advocated for devolving energy policy to Scotland, claiming independence could lower costs, and Plaid Cymru stressed the importance of long-term renewable energy investment.

Some Labour MPs have privately questioned Starmer’s stance on the duty increase, with opposition parties pushing for further cost-of-living measures. The government’s decision to freeze fuel duty until September remains a focal point in ongoing discussions about balancing economic stability and consumer relief.