Chancellor Rachel Reeves is poised to cancel a planned rise in fuel duty in an effort to provide cost of living relief to UK citizens. The move, which is expected to be announced this week, is estimated to cost the government £2.4bn a year. The decision comes after Labour and the opposition have been pressing for the 5p temporary cut to be extended, citing the ongoing economic pressures facing households.
According to sources, the cancellation of the fuel duty rise is part of a broader package of measures aimed at easing the cost of living burden on UK citizens. This includes support for households struggling with energy bills, as well as a potential increase in the National Living Wage.
The planned fuel duty rise was due to be implemented in the autumn, with the Treasury estimating that it would raise an additional £1.8bn in revenue. However, the opposition has argued that this would disproportionately affect low-income households, who are already struggling with the cost of living.
Labour's shadow chancellor, Bridget Phillipson, has welcomed the move, saying that it is a 'step in the right direction' but that more needs to be done to address the cost of living crisis. 'We need to see a comprehensive package of support for households, including measures to tackle the root causes of poverty and inequality,' she added.
The decision to scrap the fuel duty rise is likely to be met with relief by motorists and households who have been struggling with the high cost of fuel. However, it may also be seen as a short-term fix, rather than a long-term solution to the cost of living crisis.
In a statement, a Treasury spokesperson said that the Chancellor would be making a decision on fuel duty in due course, but that no final decision had been made.