Labour U-turn over fuel duty hike branded ‘too little, too late’ as Chancellor Rachel Reeves clashes with angry white van man amid new figures showing she’s raked in £500million VAT windfall thanks to sky-high pump prices
Chancellor Rachel Reeves clashed with an angry driver today as Labour’s latest U-turn over fuel duty was branded ‘too little, too late’ because it delays the raid on drivers by only a few months.
Sir Keir Starmer announced ministers would postpone their planned 5p a litre fuel duty hike at Prime Minister’s Questions after weeks of mounting pressure.
But it has only been delayed from September until the end of 2026 despite Ms Reeves raking in an extra £500million VAT windfall thanks to sky-high pump prices sparked by the Iran war.
It means motorists face a clobbering in the New Year, just as household energy bills soar to keep the heating on during winter.
Embarrassingly for Ms Reeves, she was heckled by an angry white van driver today during a photo shoot to promote the announcement at a forecourt in Leeds.
She was interrupted by the man during a broadcast interview, who shouted that the Government was ‘ruining the country’ and ‘get Keir Starmer out’.
The heckler appeared to be a Reform UK supporter as he shouted: ‘Nigel Farage. Go on Nigel.’
Chancellor Rachel Reeves was heckled during a photo shoot to promote the fuel duty announcement at a forecourt in Leeds
A man driving a white van at the forecourt in Leeds where Rachel Reeves was promoting the announcement was witnessed heckling her
Chancellor Rachel Reeves was heckled by a white van man at a forecourt in Leeds while promoting her announcement
As he drove his vehicle away, which had two St George’s flags on the roof, he said out of the window: ‘I’ve got British flags on. Am I going to get arrested? We’ve got English flags on here, Rachel, am I going to get arrested?’
But she hit back, saying: ‘I love our country. I love our country, and one of the things about our country is good manners. Not very British.’
It came as analysis by the RAC Foundation showed rocketing pump prices have already collectively cost drivers an extra £3billion.
This, in turn, has netted Ms Reeves £500million extra in VAT receipts as higher prices mean the 20 per cent levy accounts for a bigger slice going into Treasury coffers.
Dozens of countries slashed their fuel taxes weeks ago to help out hard-pressed motorists after the Strait of Hormuz was blockaded, sending oil prices soaring.
But Labour has dragged its feet after first facing calls to scrap its hike at the beginning of March after the war broke out on 28 February.
It came as average petrol prices soared to their highest today – 158.5p a litre – since December 2022 following a brief dip.
Sir Ed Davey, leader of the Liberal Democrats, which have been calling for a 10p a litre cut in the levy, said: ‘Today’s proposals are a classic case of “too little, too late” from a dithering government in crisis. Reeves is completely out of touch.
‘Despite Downing Street’s [leadership contest] psychodrama obsession, the rest of the country is still suffering with the spiralling cost of living.’
The Tories’ shadow chancellor, Sir Mel Stride, said: ‘Labour’s fuel tax hike would have hurt businesses and hammered hardworking families already stretched to breaking point.
‘For months I’ve been calling for Reeves to axe her fuel tax hike.
‘After Conservative pressure, Reeves has finally been forced into a U-turn.
‘Under the Conservatives, fuel duty was frozen or cut for 14 years in a row. Labour wanted to put it up during a cost of living crisis.
‘That tells you everything. Families can’t afford Labour.’
The Tories’ shadow chancellor, Sir Mel Stride, said ‘families can’t afford Labour’
Since the Iran war sent pump prices soaring, filling the average 55-litre tank in a family car with petrol has jumped by around £14 and over £24 for diesel
Fuel duty was previously planned to increase by 1p a litre on September 1, with a pair of 2p a litre rises on December 1 this year and March 1 next year.
It would have reversed the 5p a litre cut first introduced by the Tories in March 2022 amid soaring pump prices sparked by Russia’s invasion of Ukraine. It is currently 52.95p a litre, meaning tax accounts for around half the cost of filling up when VAT is included.
Treasury sources said ministers will keep the situation ‘under review’ and announce in the Autumn Budget whether the hike will now kick in from 1 January next year or be delayed again.
Sir Keir also said hauliers will get a ‘12-month road tax holiday’ from 1 July in a bid to keep the cost of goods on supermarket shelves down, as higher diesel prices are often passed on to consumers.
The Treasury said they would pay £1 at their annual renewal, saving £600 for a typical heavy lorry and £912 for the biggest vehicles on the road.
Farmer, rail freight and other users of red diesel will also see their fuel duty cut as part of an effort to reduce the costs of goods on supermarket shelves.
The rate will be cut from 10.18p to 6.48p a litre from June 15 until the end of the year.
Downing Street estimated that the package of measures will cost £455 million.
Since the Iran war sent pump prices soaring, filling the average 55-litre tank in a family car with petrol has jumped by around £14 and over £24 for diesel.
The average family fills up twice a month, meaning around £336 and £576 has been added to annual fuel bills respectively.
While pump prices have dipped slightly in recent weeks, petrol remains 25p a litre more expensive on average than before the conflict while diesel is over 40p more costly.
Sir Keir said: ‘I know many are feeling the pressure of energy and fuel costs, and are worried about how the conflict in Iran will affect their finances.
‘Because when global events drive up prices, it’s working people who feel it first.
‘That’s why this government is stepping in to keep fuel costs down for millions of drivers and putting money back in the pockets of working people.’
Ms Reeves said: ‘I’m keeping taxes down for drivers and businesses – putting money in the pockets of millions of workers and cutting costs for farmers and hauliers.
‘The war in Iran is pushing up fuel prices here at home but after strong growth at the beginning of the year, I am stepping in to protect people at the pump.’
