Ed Davey calls for 10p fuel duty cut until Christmas
Sir Ed Davey has urged the government to cut fuel duty by 10p a litre now and keep it in place until Christmas.
The Liberal Democrat leader said ministers should also scrap a permanent rise due in January. He is expected to make the call in his party conference speech on Tuesday, according to the BBC.
Mr Davey said petrol and diesel prices are higher than for a long time because of what he described as Trump's war with Iran. The Liberal Democrats said a 10p cut in duty would lower pump prices by 12p a litre, because VAT is charged on top of duty.
He said the three-month cut would cost about £2bn. He said it would pay for itself through extra money from the energy profits levy, a tax on oil and gas profits, plus taxes on gas, VAT and fuel duty itself.
Fuel duty, the tax added to every litre of petrol and diesel, was frozen by the Conservatives in March 2022. Labour has kept that freeze since taking office. In May, ministers delayed a planned 3p rise from September until the end of the year.
Mr Davey plans to put the fuel duty call inside a wider transport offer to conference. He plans to call for the bus fare cap to fall from £3 to £1, for rail fares to fall by 10%, and for VAT to be removed from public chargers for electric cars.
The party has made this call before. It issued a press release on 2 April titled 'Ed Davey calls for emergency 10p fuel duty cut to keep Britain moving', describing the 10p cut as part of an emergency package "to keep Britain moving", according to the Liberal Democrats.
In April the party also said it would put down its own Commons motion, a proposal for MPs to debate, for an immediate 10p cut and push for a vote if the government did not act on petrol prices. Earlier that month Mr Davey said petrol had risen by 25p a litre and diesel by 49p a litre since the war began.
The broader context here is familiar to anyone who follows budgets. Fuel duty is hard for governments to raise and expensive to cut. A short cut helps drivers and hauliers. It also creates a sharp end date.
Looking at the next few months, three questions stand out. First, the sums will be checked. A £2bn plan paid for by higher energy and shopping taxes relies on prices staying high and driving staying steady. The Treasury will want detail. Second, the January choice remains. A delay to December only puts it off. Dropping a permanent rise would mean finding money elsewhere or accepting a lasting gap. Third, party conference season favours big offers. A cheaper bus cap, cheaper rail fares and cheaper public charging sit with fuel duty in one pitch to commuters, rural drivers and electric car owners. The politics are clear. The funding is where the debate will be.
