A think tank has called on the government to implement a 10p reduction in fuel duty, alongside a speed limit cap and a new energy price cap, to help households cope with the economic fallout from the Iran conflict.
Fuel Duty Cut and Energy Price Cap Proposed
The Institute for Public Policy Research (IPPR) recommends that Labour Party ministers temporarily cut fuel duty by 10p and introduce an annual energy price cap of £2,000 to support consumers. The fuel duty cut would remain in effect until spring 2027, according to the institute.
William Ellis, a senior economist at the IPPR, stated: "The UK cannot afford to sit back and let another energy shock drive up inflation and damage the economy. The UK economy and public finances are expected to take a significant hit from the Iran conflict, regardless of whether the government intervenes."
Government Response
A Treasury spokesperson responded: "This is not our war and that is why we did not join it. Our priority is de-escalation. We are getting debt and borrowing down while supporting families and businesses through this crisis. Thanks to our decisions, the energy price cap has fallen by £117. We have extended the 5p fuel duty cut until September, supporting households using heating oil, boosting pay for millions, and freezing rail fares and prescription charges."
Chancellor's Assurance
Last month, Labour Party Chancellor Rachel Reeves told The Sun: "I know families are worried about what’s happening in the world right now. About what it means at the pumps, at the tills and for people’s pockets. People are struggling. As Chancellor, my priority is keeping costs down for families and businesses – and I’m angry that they will feel the financial fallout of a war that’s not their fault. But those costs are real, and I want to reassure the British people that I get it – I will do everything in my power to protect them. The world is uncertain right now. Working people deserve a Chancellor who listens and acts. I am doing both."
