Rachel Reeves is to unveil free bus travel for one group in August and tariff cuts on biscuits, chocolate and nuts, saving families more than £150m a year.
Reeves is set to unveil ‘Great British Summer Savings’ package on Thursday (Image: Getty)
Millions of families are set to benefit from free bus travel for children and cuts to import tariffs on food and drink this summer, as Chancellor Rachel Reeves prepares to unveil a cost-of-living support package on Thursday aimed at easing the financial pressure of rising prices linked to the Middle East conflict.
At the heart of the package is a scheme giving children between the ages of five and 15 the run of England’s local bus network throughout August without charge, an initiative that will cost the Treasury upwards of £100million once support for bus operators is factored in.
What tariffs is the Government cutting?
Running alongside the travel offer is a sweeping suspension of import duties covering more than 100 products. Among those tipped to become cheaper at the till are biscuits, chocolate, dried fruit and nuts, though the definitive list will not be published until next week. Taken together, the duty cuts are expected to put more than £150million back into shoppers’ pockets over the course of a year.
The measures form part of a broader Government strategy to tackle inflation, following a series of earlier interventions including an extension of the 5p fuel duty reduction until the end of the year, tax relief for haulage companies and assistance with red diesel costs for agricultural businesses.
What did Keir Starmer and Rachel Reeves say about the support package?
Prime Minister Sir Keir Starmer said: “We know many hardworking families are still feeling the squeeze and too often think they have to hold back. By giving every child free bus travel throughout August and cutting tariffs on everyday food items, we’re putting money back into people’s pockets and making life that bit easier.”
The Chancellor described shielding households from rising costs as her overriding priority. “This summer I want every family to be able to enjoy themselves, that’s why we’re launching the Great British Summer Savings Scheme, and why we’re helping kids with free bus travel throughout August,” she said, adding that her economic approach remained appropriate as the Iran conflict continued to push domestic prices higher.
What is happening to energy bills this summer?
Despite the wider package, reports GB News, the Chancellor is not expected to announce any immediate help with energy bills on Thursday. The household energy price cap is forecast to rise by £209 a year from July, following the closure of the Strait of Hormuz which has sent global oil and gas prices sharply higher. According to energy consultancy Cornwall Insight, a typical dual-fuel household can expect to pay around £1,850 under the cap between July and September, up 13 per cent on the £1,641 ceiling that applied in April.
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Any targeted support with winter energy costs is expected to be confirmed separately in September.
What is the current state of inflation?
The most recent ONS data showed inflation easing from 3.3 per cent to 2.8 per cent in April, though economists cautioned the improvement owed more to Ofgem’s seven per cent energy price cap cut than to any genuine cooling of underlying price pressures.
The Government has stopped short of blanket universal support, with ministers privately warning that spending without funding risks spooking the bond markets and driving mortgage rates higher.