Calls Intensify for Reeves to Reverse Fuel Duty Hike Amid Iran Conflict
Chancellor Rachel Reeves is encountering increasing pressure from opposition parties to cancel a scheduled increase in fuel duty as tensions in the Middle East persist.
The planned rise in tax on petrol and diesel is set for September, coinciding with the phasing out of a 5p reduction implemented following Russia's full-scale invasion of Ukraine.
Reform UK, the Conservative Party, and the Liberal Democrats are advocating for the continuation of the fuel duty cut, citing the ongoing war in Iran as a critical reason.
Energy prices have surged since the United States and Israel initiated strikes on Iran, amid concerns that the conflict could cause prolonged supply disruptions.
On Tuesday, Reform UK proposed a series of reductions in green levies to offset the Treasury's cost of maintaining the lower fuel duty rate.
This proposal includes eliminating government grants designed to encourage the purchase of heat pumps and electric vehicles, as well as cutting £9.4 billion in subsidies allocated over the next three years for carbon capture and storage projects.
At a press event held at a petrol station in Derbyshire, Reform UK's Treasury spokesman Robert Jenrick stated that the Middle East situation represented the "worst possible moment" to increase fuel duty.
"The situation in the Middle East means it is the worst possible moment for fuel duty to rise," said Robert Jenrick.
Jenrick and Reform leader Nigel Farage posed for photographs in front of a price board branded by the party, displaying a reduced price for a litre of diesel alongside a sign reading "Reform reduction."
The Conservative Party, also opposing the planned increase, published a motion on Tuesday aiming to trigger a future parliamentary vote on the matter.
During a Commons session, Chancellor Reeves emphasized that the "most important thing" ministers could do to keep fuel prices down was to assist in "de-escalating" the conflict.
"The most important thing ministers can do to keep fuel prices down is to help de-escalate the conflict," Reeves said.
She further noted that the government launched a scheme last month to provide motorists with real-time data on forecourt prices, enabling them to "shop around."
Reeves also hinted at a potential future increase in the tax-free mileage allowance drivers can claim, acknowledging that motoring costs had "evolved significantly" since the current 45p per mile rate was established in 2011.
Background on Fuel Duty Cut and Political Responses
The 5p reduction in fuel duty was introduced by then-Tory Chancellor Rishi Sunak in 2022 in response to a global surge in energy prices following Russia's invasion of Ukraine.
Initially intended as a temporary 12-month measure, the cut was extended in 2023 by the previous Conservative government and subsequently prolonged by Labour upon taking office.
Reeves extended the cut again during last year's Budget, while outlining plans to phase it out starting in September, with the full 5p reduction to be removed by March 2027.
Historically, successive governments have raised fuel duty in line with inflation, but no increases have occurred since 2011.
At the Derbyshire news conference, Nigel Farage criticized the government's green levies as "lunatic" and condemned Labour's restrictions on new oil and gas exploration in the North Sea.
"The government's green levies are lunatic," Farage stated.
Farage also addressed questions regarding his party's position on the Iran conflict, following inconsistent statements from some frontbench MPs during media interviews.
He acknowledged "differing opinions" within the party about whether the UK should "physically" participate in strikes against Iran but argued that the UK should not have declined the initial US request to use British bases for strikes targeting missile sites used against allies.
"The US and Israel would have launched the strikes whatever we said or did," Farage explained, adding that the UK was unable to "get involved directly" due to previous defence cuts.
