Starmer’s Cost-of-Living Adviser Urges Extension of Fuel Duty Cut

Lord Walker, the Labour Party’s cost-of-living advisor, has recommended that the government extend the 5p fuel duty reduction beyond its September expiration, citing recent petrol price increases tied to the US and Israel’s actions in the Iran conflict. The policy, initially introduced by the previous Conservative administration in 2022 amid the Russian invasion of Ukraine, has now faced renewed scrutiny due to Iran’s blockade of the Strait of Hormuz, which disrupted global oil supplies.

The current surge in fuel costs has sparked debates over whether the tax cut should be prolonged. Walker, who also leads Iceland supermarkets, highlighted that Australia recently reduced its fuel tax by 14p per litre, suggesting similar measures could benefit the UK. He argued that lowering fuel duties might ease financial strain on both households and businesses, particularly as oil prices have risen sharply since the Middle East conflict escalated.

Global Measures to Address Energy Crisis

World leaders are implementing varied strategies to manage the energy crisis. Ireland has slashed petrol and diesel taxes, while Australia has temporarily halved fuel duty for three months. Slovenia introduced the first EU fuel rationing system, and Egypt mandated early closures for shops and eateries to cut energy consumption. These actions reflect widespread efforts to stabilize costs amid geopolitical tensions.

Labour Government’s Energy Support

As part of its response, the Labour government launched an energy cap on 1 April, capping charges for gas and electricity units. However, forecasts indicate bills could surge significantly in July, coinciding with the next energy cap review, due to sustained high oil prices. Chancellor Rachel Reeves stated that additional support would be directed toward those most affected by rising heating oil costs.

Lord Walker is the latest to advocate for maintaining the fuel duty cut past September, joining calls from Conservative, Reform UK, and Liberal Democrat leaders. While some Labour MPs have privately questioned Sir Keir Starmer’s commitment to the tax increase, opposition parties argue for further assistance to counteract the price spike. Reform’s Robert Jenrick proposed halving petrol VAT for three months, while the Green Party warned of potential household bill hikes of up to £300. The SNP and Plaid Cymru have also expressed views, with the former pushing for Scottish energy independence and the latter emphasizing renewable investments.

“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. We’re also acting to protect people from unfair price rises and bring down food prices at the till.”