MPs urge Chancellor Rachel Reeves to look at fuel duty cut before September rise

Rachel Reeves has come under pressure from MPs to cut fuel duty to deal with the economic fallout of war in the Middle East.

The Chancellor defended the Government’s record since the general election almost two years ago, saying the Treasury had “extended the cut in fuel duty two times” and adding its planned rise in September was “under review”.

Liberal Democrat Treasury spokeswoman Daisy Cooper was among the MPs who called for cut to the tax on petrol, diesel and other fuels.

She suggested reducing it by 12p per litre and told MPs other countries’ Governments, including Australia’s, had cut their fuel duties in response to (US president Donald) “Trump’s idiotic war in Iran”.

Ms Reeves replied that Ms Cooper had previously asked for a 10p per litre cut.

“Now it’s a 12p cut in fuel duty,” the Chancellor continued.

“What she has failed to explain is how on Earth she’s going to pay for any of these policies.”

Ms Reeves said she supported the Lib Dems’ opposition to the war.

“But they appear to be the only people on the planet that think a war in the Middle East is somehow good for the Treasury coffers,” she told the Commons.

“Now, I wouldn’t be surprised that if in their next manifesto, they said that they would commit to closing the Strait of Hormuz for good – it’s not good economic policy.”

Around a fifth of the world’s shipped oil supplies are carried through the Strait, which has been effectively closed by Iran since the US-Israeli bombing campaign began at the end of February.

Responding to Liberal Democrat MP Jess Brown-Fuller, who warned the owner of a haulage firm in her Chichester constituency had reported a 40% rise in the cost of diesel, Ms Reeves said: “Fuel duty was never lower at any point under the previous Conservative government, and indeed the Conservative-Liberal Democrat government.

“And we are keeping under review what happens from September.”

According to last year’s budget, fuel duty – currently at 52.95 pence per litre for standard petrol and diesel – is set to return to its March 2022 levels by March 2027.

This is expected to happen incrementally, with a 1p rise on September 1 2026, followed by a further 2p from December 1, and another 2p in spring next year.

“In the first three months of this year, I think it’s important to know that revenues from fuel duty were no higher than they were just a year ago,” Ms Reeves said.

Conservative MP Alicia Kearns referred to the rural fuel duty relief, a 5p per litre tax cut on the petrol and diesel which retailers sell in areas of the country considered remote, such as the Inner and Outer Hebrides and the Isles of Scilly.

She said: “In rural areas like Rutland and Stamford, we are reliant on our cars, so fuel costs are hitting us hard.

“So I have a simple ask for the Chancellor she could deliver on now – will she expand the 5p per litre rural fuel duty relief to more areas as soon as possible, particularly Leicestershire, Rutland and Lincolnshire, who desperately need it?”

Treasury minister James Murray replied: “We inherited plans from the previous government that would have seen fuel costs go up for people across the country.

“We have extended the 5p cut in fuel duty.

“We have extended the freeze, and that is an important way of helping people with the cost of living right now.”