The Prime Minister made sure he got the credit – at the expense of his Chancellor, writes Whithall Editor Jonathan Walker.
Prime Minister Keir Starmer and Chancellor Rachel Reeves. (Image: Getty)
Rachel Reeves is due to make a big speech about the cost of living crisis, and the help the Government is offering to struggling households. She’ll be hoping the media and fellow MPs are paying attention when she sets out her plans on Thursday, and for good reason. This is still the biggest issue facing the public.
But the Chancellor may as well stay at home. Keir Starmer has already made the biggest announcement for her. He told the House of Commons that a planned increase in fuel duty has been scrapped, at least for now, to help motorists faced with rising pump prices as a result of the war in Iran. The Prime Minister told MPs the 5p per litre fuel duty cut introduced by the Conservative Government in March 2022 would be extended for the rest of the year.
That means the rate will remain nearly 53p per litre.
It’s a decision that will be welcomed by many people. Conservatives and Reform have both been campaigning for the Government to scrap the planned increase, and Tory leader Kemi Badenoch claimed victory when she spoke in Parliament.
The Labour Government, on the other hand, will argue that it deserves the credit, or the blame, for the things that it does, and perhaps that’s fair.
But credit for this particular decision won’t go to Rachel Reeves, even though she’s in charge of tax policy. Sir Keir made sure the spotlight was firmly on him as he used PMQs to make the announcement while Ms Reeves was absent. In fact, the Chancellor was attending a property and infrastructure event in Leeds.
The Government has done the right thing. Petrol duty rates were previously planned to increase by 1p per litre on September 1, with a pair of 2p per litre rises on December 1 this year and March 1 next year.
But Iran’s restrictions on tankers passing through the Strait of Hormuz mean the average price of a litre of petrol and diesel at UK forecourts is 26p and 44p, respectively, higher than before the conflict started on February 28.
As Sir Keir said: “Families across the United Kingdom are facing impacts of a war that we did not choose.”
He also announced that hauliers would benefit from a “12-month road tax holiday”, paying just a nominal £1 for their annual renewal. This will save £600 for a typical heavy lorry and £912 for the biggest vehicles on the road.
Labour has done something good for once, but Sir Keir, as he battles potential leadership challenges from Andy Burnham and Wes Streeting, made sure they got the glory – not his beleaguered Chancellor.