Reeves poised to cancel planned fuel duty rise to help with cost of living

Rachel Reeves is planning to cancel a rise in fuel duty this week when she unveils a package of measures to reduce the cost of living. The chancellor will announce she will not put up the tax by 1p as was due to happen in September, government sources said, and she could cancel all of a 5p rise that is due to happen in stages over the subsequent six months. The move is part of a wider plan to mitigate a rise in inflation caused by the war in Iran. Reeves is expected to announce the plan to the Commons on Thursday. The prime minister’s spokesperson declined to comment on the plans, which were first reported by the Sun on Sunday. However, he said: “The government is determined to keep costs down for motorists paying more because of the war in Iran. That’s why we’ve extended the 5p fuel duty cut twice, until September. While the chancellor will continue to monitor the situation, as the chancellor has set out, a rapid de-escalation in the Middle East remains the best way to keep pump prices low.” The Treasury declined to comment. Reeves announced at the last budget that she would freeze fuel duty for nine months but that she would end a temporary 5p cut – first announced by Rishi Sunak in 2022 in the wake of Russia’s invasion of Ukraine – beginning this September. In recent months, she has come under pressure to extend the 5p temporary cut, at an estimated cost to the government of £2.4bn a year. …