Richard Walker, Iceland’s executive chairman and the Prime Minister’s cost of living champion, calls on the government to abandon a planned fuel duty increase amid soaring pump prices triggered by the Iran conflict. His remarks intensify pressure on Chancellor Rachel Reeves to reverse the scheduled September rise.
Fuel Duty Background and Price Surge
Fuel duty remains frozen since 2011 and saw a 5p per litre reduction in 2022 following Russia’s invasion of Ukraine. However, the Chancellor announced last year that this cut would gradually end between September this year and March 2027. Recent Middle East tensions have spiked global oil and gas prices, prompting demands for a policy reversal.
Diesel now averages 185.2p per litre at UK pumps, a 30 percent jump since the Iran conflict began on February 28, while petrol reaches 154.5p per litre, up 16 percent in the same timeframe.
Walker’s Direct Appeal
Speaking on BBC Radio 4’s Today programme, Lord Walker stated: “The 5p fuel duty cut… is an interesting one. That’s going to expire in September. I think given where we are, we do need to be thinking and talking about extending it or enlarging it. Interestingly, the Australian government have recently taken 14p per litre cut to their fuel tax. I mean, this cut is 5p.”
He also endorsed comments from Conservative peer and Next CEO Lord Simon Wolfson, who argued that the Treasury should avoid profiting from the conflict by adjusting duty to maintain steady tax revenue. Lord Walker replied: “Lord Wolfson is a great guy and very intelligent, and he might have a point there.”
Government Stance and Opposition Proposals
The Prime Minister has pledged to keep the fuel duty rise under review given developments in Iran. Officials have launched a fuel price comparison tool to help drivers locate cheaper options nearby.
Opposition parties advocate bolder measures: Conservatives propose scrapping VAT on energy bills for three years, Reform UK seeks VAT cuts on fuel and elimination of green levies on energy, and Liberal Democrats call for a 10p fuel duty reduction. Countries like Australia have already implemented a 14p per litre fuel tax cut to ease driver burdens.
A Treasury spokesperson noted: “We have the right economic plan for a more volatile world, taking a responsible approach to supporting working people in the national interest. Fuel duty is frozen until September and we’re enabling targeted support for those facing higher heating oil costs. We’re also acting to protect people from unfair price rises if they occur and to bring down food prices at the till.”
Lord Walker’s Role
The Prime Minister appointed Lord Walker, 45, as cost of living champion in February. As Iceland chairman and son of its founder, he shifted from Conservative aspirations—quitting the party in 2023—to backing Labour. Despite critiquing early government moves and rating performance at six out of ten, he received a life peerage this year.
