Andy Burnham has been urged to cut fuel duty by 10p a litre until Christmas to immediately ease the cost of living – as the Liberal Democrats joined calls to scrap a permanent January rise.
Fuel duty was cut by 5p under the Conservatives in March 2022 and frozen, with a 1p increase planned for September 2026 and another 2p rise set for December later delayed by Labour until 1 January, 2027.
The Liberal Democrats want Burnham to go further, cutting fuel duty immediately by 10p a litre until Christmas, which the party says would take 12p off the price at the pump.
Sir Ed Davey, leader of the Lib Dems, has also joined the Conservatives and Reform UK to call for the planned 1 January rise – the first in 15 years – to be scrapped.
Speaking at the party’s conference in Brighton, Davey blamed the US war with Iran for rising petrol and diesel prices and said “people need help now”.
Motor fuel prices were 23 per cent higher in August than a year earlier, according to the Office for National Statistics, as the war in Iran continued.
Davey told the party would talk increasingly about tax cuts, acknowledging a significant change of position.
He put the cost of the temporary 10p cut at about £2bn but told BBC News it would pay for itself through extra government revenue from the energy profits levy, gas taxes, VAT and fuel duty.
It is not the first time he has made the call. In April, Davey also called for a 10p cut, saying families were paying more at the pump because of “a war they didn’t start and don’t support”. The Labour Party said at the time the plans were unfunded, and invoked Liz Truss’s disastrous economic policies.
Fresh pressure on Burnham before the Budget
Labour chair Bridget Phillipson told the BBC’s Sunday with Laura Kuenssberg that Healey would be open to suggestions ahead of the Budget, but that the Government had already acted on fuel duty.
A Treasury spokesperson said: “As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”
Fuel duty has been charged at 52.95p per litre since then-chancellor Rishi Sunak cut it by 5p in 2022 after Russia’s invasion of Ukraine. Before that, the rate had been frozen at 57.95p since 2011.
A phased withdrawal of the 5p cut, announced by then-chancellor Rachel Reeves at last November’s Budget, was due to begin in September.
But the Government announced in May that the freeze would be extended to the end of the year, saying it wanted to support motorists as conflict in the Middle East pushed up pump prices.
That pushed a 1p rise due in September and a 2p rise due in December back to 1 January, when they will take effect together as a 3p increase.
This will be followed by a 2p increase on 1 March, 2027, fully reversing the 2022 5p cut.
The Conservatives have taken credit for the decision to push back the increase in fuel duty, and last month the party’s leader, Kemi Badenoch, said Burnham should pledge to keep the 5p cut so that families and businesses are “protected from rising costs”.
Reform also called in March, before the delay was announced, for the Government to scrap the 5p increase to fuel duty.
The party’s Treasury spokesman, Robert Jenrick, said it was the “worst possible moment” for fuel duty to rise due to the rising cost of living.
The party said it would pay for keeping the 5p cut by scrapping grants for heat pumps and electric cars and £9.4bn in carbon capture and storage subsidies.