What levers could Rachel Reeves pull to help with rising prices?

## Summary
Photograph: Dan Kitwood/Getty Images View image in fullscreen Rachel Reeves promised to give an update on fuel pricing within the next month. Photograph: Dan Kitwood/Getty Images Explainer What levers could Rachel Reeves pull to help with rising prices? What the chancellor could do to counter the economic impacts of Iran war, from stopping price gouging to cancelling fuel duty rises Reeves rules out universal support on energy bills Business live – latest updates Rachel Reeves updated MPs on Tuesday about the steps the government was taking to cushion the impact of the Iran war on consumers and the UK economy. Here are some of the levers she could pull: Protecting (some) consumers from higher bills – eventually Speculation has been rife since the effective closure of the strait of Hormuz sent oil and gas prices soaring, that the government may be forced to step in to protect households from a jump in utility bills.

## Article Content
Rachel Reeves promised to give an update on fuel pricing within the next month.
Photograph: Dan Kitwood/Getty Images
View image in fullscreen
Rachel Reeves promised to give an update on fuel pricing within the next month.
Photograph: Dan Kitwood/Getty Images
Explainer
What levers could Rachel Reeves pull to help with rising prices?
What the chancellor could do to counter the economic impacts of Iran war, from stopping price gouging to cancelling fuel duty rises
Reeves rules out universal support on energy bills
Business live – latest updates
Rachel Reeves updated MPs on Tuesday about the steps the government was taking to cushion the impact of the Iran war on consumers and the UK economy. The chancellor stopped short of announcing specific immediate support but said she was
contingency planning
for the tough months ahead.
Here are some of the levers she could pull:
Protecting (some) consumers from higher bills – eventually
Speculation has been rife since the effective closure of the
strait of Hormuz
sent oil and gas prices soaring, that the government may be forced to step in to protect households from a jump in utility bills.
But Reeves gave the clearest indication yet that she has no intention of repeating the across-the-board subsidies
introduced by Liz Truss in autumn 2022
, which went on to cost the Treasury about £40bn, and were worth £1,350 to households in the top 10% of earners.
Reeves said Truss’s approach had “left us with high levels of national debt, a cheque written then for a bill that is still being paid today”.
Instead, the chancellor said officials had been working with the Department for Work and Pensions and local authorities to assemble the data necessary to offer more targeted support to poorer households – at a lower cost to the taxpayer. Thinktanks including the Resolution Foundation have been urging the government for some time to take on this complex task.
She also gave a hint on timing.
Energy bills
are poised to fall from April, as a result of measures Reeves took in her autumn budget, including shifting the cost of some green measures on to general taxation.
They are then forecast to rise
to nearly £2,000
in July, when the next quarterly energy price cap – set on the basis of market prices – comes into force.
Energy price cap chart
There had been suggestions the government might act before then, but Reeves pointed out most of household spending on energy happens over winter, in what appeared to be a hint that any support may not come into effect until the autumn.
Cracking down on price gouging
From the start of the conflict, the government has warned that it will not allow companies to take advantage of the crisis by short-changing consumers.
That message has been so strident, in fact, that at one point petrol retailers threatened to pull out of a meeting with the chancellor,
accusing the government of “inflammatory language”
.
But recent academic research has suggested companies tend to take advantage of economy-wide shocks to raise their profit margins.
To prevent that, Reeves said she would ensure the Competition and Markets Authority, the regulator, has the powers it needs to stop profiteering. “This government will not tolerate any company exploiting this crisis,” she said.
View image in fullscreen
Reeves said she would meet supermarket bosses to ensure they are doing what they can to help consumers.
Photograph: Andy Rain/EPA
Reeves also said she would meet supermarket and bank bosses later this week, to ensure they are doing what they can to help consumers.
Cancelling planned fuel duty rises
Opposition parties have been campaigning noisily for Reeves to cancel the planned 1p a litre increase in fuel duty due to come into force in September, with 2p rises then planned for December and March.
These moves are intended to reverse a 5p a litre cut implemented by the Tories – but now look awkwardly timed, given the global backdrop.
UK petrol pump prices chart
The cost of oil remains above $100 a barrel, and petrol is already
costing UK motorists 13.5p a litre more
than before hostilities broke out, according to the RAC.
Reeves made no commitment to cancel the planned rises; but did promise to give an “update on fuel pricing within the next month”.
Getting on with EU negotiations
Reeves suggested the government’s hoped-for sanitary and phytosanitary (SPS) deal with the EU, which will stop exports being subject to veterinary checks, could cut food prices.
She said the government hopes to conclude the negotiations by the end of this year – almost two-and-a-half years after Labour stated its intention to get an SPS deal in its manifesto.
View image in fullscreen
An UK-EU agrifood deal could help lower food prices.
Photograph: Bloomberg/Getty Images
The chancellor also said she had asked officials to look at whether tariffs on imports of some agrifoods could be reduced, to cut prices for consumers.
Accelerating energy projects
Ministers, including the energy secretary, Ed Miliband, h

---

## Expert Analysis

### Merits
- Here are some of the levers she could pull: Protecting (some) consumers from higher bills – eventually Speculation has been rife since the effective closure of the strait of Hormuz sent oil and gas prices soaring, that the government may be forced to step in to protect households from a jump in utility bills.
- Cracking down on price gouging From the start of the conflict, the government has warned that it will not allow companies to take advantage of the crisis by short-changing consumers.
- But recent academic research has suggested companies tend to take advantage of economy-wide shocks to raise their profit margins.

### Areas for Consideration
N/A

### Implications
- Photograph: Dan Kitwood/Getty Images Explainer What levers could Rachel Reeves pull to help with rising prices?
- What the chancellor could do to counter the economic impacts of Iran war, from stopping price gouging to cancelling fuel duty rises Reeves rules out universal support on energy bills Business live – latest updates Rachel Reeves updated MPs on Tuesday about the steps the government was taking to cushion the impact of the Iran war on consumers and the UK economy.
- Here are some of the levers she could pull: Protecting (some) consumers from higher bills – eventually Speculation has been rife since the effective closure of the strait of Hormuz sent oil and gas prices soaring, that the government may be forced to step in to protect households from a jump in utility bills.
- Energy bills are poised to fall from April, as a result of measures Reeves took in her autumn budget, including shifting the cost of some green measures on to general taxation.

### Expert Commentary
This article covers reeves, energy, government topics. Notable strengths include discussion of reeves. Readability: Flesch-Kincaid grade 0.0. Word count: 953.