Keir Starmer’s cost of living tsar today urged the Government to scrap a planned hike to fuel duty, as British drivers are hammered by rising pump prices due to the Iran war.
Richard Walker, the boss of supermarket Iceland, added to growing pressure on Chancellor Rachel Reeves to cancel the looming fuel duty rise in September.
Fuel duty has been frozen since 2011, and was cut by 5p in 2022 in response to Russia’s invasion of Ukraine.
But, at her Budget last year, Ms Reeves said the 5p cut would be unwound between September this year and March 2027.
She is facing demands to U-turn on those plans in the wake of the Middle East crisis, which has seen a surge in global oil and gas prices.
The latest average price of a litre of diesel at UK forecourts is 185.2p, up 30 per cent since the Iran war started on February 28, according to the RAC.
And average petrol prices have reached 154.5p per litre – a rise of 16 per cent over the same period.
Now even Keir Starmer’s ‘cost of living tsar’ says Rachel Reeves should scrap fuel duty hike as Brits are hammered by rising pump prices due to Iran crisis
Other countries, including Australia, have already taken action to reduce the impact of price hikes for drivers amid the Middle East chaos.
Lord Walker told BBC Radio 4’s Today programme on Friday: ‘The 5p fuel duty cut… is an interesting one. That’s going to expire in September.
‘I think given where we are, we do need to be thinking and talking about extending it or enlarging it.
‘Interestingly, the Australian government, I was reading, have recently taken 14p per litre cut to their fuel tax. I mean, this cut is 5p.’
Lord Walker was also asked about Tory peer Simon Wolfson’s comment that the Treasury must not end up profiting from the Iran war.
Lord Wolfson, the Next chief executive, said the Government would be taking higher tax in fuel duty because of the spiking prices, and could ‘balance the books’ by bringing it down to ensure the tax take remains the same.
Labour peer Lord Walker said: ‘Lord Wolfson is a great guy and very intelligent, and he might have a point there.’
The Prime Minister has previously promised to keep the planned rise in fuel duty from September ‘under review in light of what’s happening in Iran’.
The Government has stepped up efforts to help drivers find the cheapest fuel in their area through a price comparison site.
But rival parties have called for swifter action and have set out their own plans to lower the price of petrol and home energy bills as households face the prospect of energy bill hikes later this year.
The Tories have called for VAT on energy bills to be removed for the next three years, Reform UK has pledged to reduce VAT on fuel, and scrap green levies on energy bills, and the Liberal Democrats have said a 10p cut in fuel duty should be introduced.
A Treasury spokesperson said: ‘We have the right economic plan for a more volatile world, taking a responsible approach to supporting working people in the national interest.
‘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 if they occur and to bring down food prices at the till.’
Sir Keir named Lord Walker as his ‘cost of living champion’ in February – despite the Labour peer having previously only given the PM a ‘six out of ten’ rating.
The 45-year-old is the chairman of Iceland and the son of the supermarket chain’s founder, Malcolm Walker.
He previously hoped to be a Conservative MP, but quit the Tories in 2023 before going on to support Labour.
The businessman attended the launch of Labour’s manifesto ahead of the 2024 general election, but later went on to be critical of Sir Keir’s first few months in power.
He last year gave the Government a lacklustre ‘six out of ten’ rating for its performance and also criticised Ms Reeves’ tax hikes on businesses.
Despite his comments, Sir Keir handed Lord Walker – who has previously expressed a desire to be PM himself – a life peerage at the beginning of this year.
