Starmer: Fuel Duty Freeze a ‘Budget-by-Budget’ Issue

Sir Keir Starmer said Labour has always supported the freeze, but refused to make future commitment on the policy, and ruled out reforming council tax bands.
Starmer: Fuel Duty Freeze a ‘Budget-by-Budget’ Issue
Labour leader Sir Keir Starmer visits Bristol Rovers football ground in Bristol, England, on June 17, 2024. (Geoff Caddick/Getty Images)
Lily Zhou
Updated:
0:00

Sir Keir Starmer has suggested he may keep fuel duty frozen, but refused to make a commitment, saying it’s “a budget-by-budget” issue.

Asked about his plan on fuel duty, Sir Keir told GB News on Friday that Labour knows “how impactful it is” but declined to “write five years-worth of budget two or three weeks before the election.”

“Every year we’ve supported the position of keeping that frozen. It’s a budget-by-budget issue, but I would say to anyone who’s concerned on this, check our track record on this,” he said.

“We’ve always said freeze the fuel duty. That’s our long history and we do it for a purpose.”

Sir Keir didn’t mention whether he will further extend the current 5-pence reduction on fuel duty, which is set to end next year.

The UK’s Fuel duty, which previously rose with inflation, has been frozen since 2011 at 57.95 pence a litre for petrol and diesel.

In March 2022, then-Chancellor Rishi Sunak announced a temporary 5-pence reduction after fuel prices rocketed with increased demand following COVID-19 lockdowns and reduced supply after Russia’s invasion of Ukraine.

The 5-pence reduction has been extended twice and is now set to end in March 2025.

According to the latest forecast from the Office for Budget Responsibility, the end of the cut will increase revenue on fuel duty by £2.5 billion, to £27.3 billion in 2025/26.

‘Working People’

With the tax burden at its highest in over 70 years and the debt level at its highest in over 60 years, Labour has taken a cautious approach on pre-election giveaways, and has sought to build their party’s fiscal credibility by vowing to balance spending with income. The party has also promised not to increase taxes for the “working people.”

Asked who these people are, Sir Keir said they are “people who work for a living,” many of whom don’t have much savings.

“They pay their national insurance, they pay their income tax and they broadly speaking don’t have the wherewithal to write a big cheque when they get into trouble financially. Now that will be many millions of people who don’t have very much in savings,” he said.

“It now would actually cover quite a lot of people who do have savings, but, you know, as any working person knows who’s got savings, you work hard, you put those savings aside normally for a car, a holiday, possibly a house or a deposit for yourself or your children, you certainly don’t want to be using that money for energy bills or cost-of-living crises.

“It’s those people who rely on our public services and work for a living and that’s why I’ve said for working people no increase in income tax, in national insurance or VAT—I think they’re already paying too high a price under this government.”

No reform on Council Tax Bands

On council tax, Sir Keir ruled out reforming council tax bands, instead saying: “All of our plans are fully costed, fully funded.”

Council tax banding in England—across categories A to H—is based on property values at April 1, 1991.

It is set locally, based on councils’ revenue and spending plans.

In 2024, the highest value band H homes in Westminster, central London, pay a £1,946.32 bill, less than some of the below-average value homes in Blackpool (£2,024 for a band C bill).

Early in the general election campaign, David Phillips of the Institute for Fiscal Studies described council tax in England as being in an “increasingly absurd situation“ whereby it’s based on property values ”a third of a century ago.”

Also appearing on GB News, former Labour MP Luciana Berger defended Sir Keir’s decision, saying, “there is an opportunity for people to contest their banding” and she had done it successfully twice.

PA Media contributed to this report.