Rachel Reeves will on Thursday promise free bus rides for children aged 15 and under during August and set out plans to cut tariffs on some food imports as the government tries to cushion households from a fresh rise in inflation later this year.
The chancellor will give her statement in the House of Commons and is expected to present the measures as part of the Great British summer savings scheme, alongside plans to remove tariffs on imports of foods including biscuits, chocolates and dried fruits. The Treasury will consult on the details of the tariff cuts.
The announcement comes after Keir Starmer said on Wednesday that the government would postpone planned increases in fuel duty due in September and December, extend the freeze in fuel duty for the rest of the year and give hauliers a 12-month vehicle tax holiday. He also said duty on the red diesel used by farmers would be cut by a third. The Treasury said the cost of the package for motorists was expected to be about £400m.
Starmer has left open one important question: the Treasury has not made clear whether the full 5p increase in fuel duty would still go ahead in January. That uncertainty matters because the latest support is being sold as short-term relief, not a permanent shift in tax policy.
The measures are being framed as help with the cost of the Iran conflict, but they also follow criticism of an earlier attempt to push supermarkets into announcing fixed cheap prices for basic foods. That idea foundered after retailers attacked it, leaving ministers to turn instead to tariffs and tax relief.
The political divide over who would actually benefit has already been set out. Jonathan Marshall said low-income families, who are still £1,800 poorer than they were before the last energy price shock, will be hit hardest by another round of rising food prices and energy bills in the autumn, while the richest fifth of households would gain more than twice as much as the poorest fifth from the support announced so far.
Retailers have also signaled they want a lighter touch. Stuart Machin said government should not try to run business and urged ministers to cut tax and regulatory burdens instead of dictating prices in a fiercely competitive market. Reeves will now have to show that the package can bring prices down quickly enough to matter before households feel the next squeeze.
