Quick answer: Sir Ed Davey has called for an immediate 10p-per-litre fuel duty cut until Christmas and cancellation of a permanent increase due in January. The Liberal Democrats estimate the temporary policy would cost about £2bn and lower pump prices by 12p a litre.
Sir Ed Davey is pressing the government for an immediate 10p fuel duty cut per litre until Christmas, putting help for drivers at the centre of a wider cost-of-living package. The Liberal Democrat leader also wants ministers to scrap a permanent fuel duty increase due to take effect in January.
The proposal is a call for government action, not an announced change to the tax. The Liberal Democrats claim their proposed reduction would bring prices at the pump down by 12p a litre.
Davey argues temporary relief would pay for itself
Davey put the cost of the temporary policy at about £2bn and argued that supporting drivers would stimulate the economy. He described the measure as a three-month intervention rather than a permanent reduction.
“Petrol and diesel prices are higher than they’ve been for a long time because of Trump’s mad war with Iran, and people need help now,” he said.
Setting out his argument for funding the policy, Davey added: “It’s a three-month package, a temporary package, but if you look at the extra money the government will get through the energy profits levy, from gas taxes, from VAT and fuel duty, it’s self-funding.”
The claim that the cut would pay for itself is Davey’s assessment. Similarly, the projected 12p reduction in pump prices is the Liberal Democrats’ estimate of what a 10p duty cut would deliver, rather than a price change already in place.
What has already happened to fuel duty?
Fuel duty was frozen under the Conservatives in March 2022, and Sir Keir Starmer’s government continued that freeze. In May, the government decided to delay a planned 3p increase from September until the end of the year.
Davey’s demand therefore has two parts: an immediate temporary cut through Christmas, and the cancellation of the permanent increase scheduled for January. His proposal goes beyond keeping the existing freeze in place.
Cheaper bus and rail fares also on the agenda
The fuel duty proposal forms part of a broader transport-cost pitch. In a speech to his party’s conference on Tuesday, Davey is due to call for the bus fare cap to fall from £3 to £1 and for rail fares to be reduced by 10%.
He will also call for VAT to be removed from public electric-vehicle charging points. A review of network costs that the Liberal Democrats have labelled unfair is another element of the planned proposals.
Labour points to action already taken
The demands come ahead of next month’s Budget, with Chancellor John Healey facing pressure to raise taxes or cut spending amid soaring government borrowing costs. Labour Party chair Bridget Phillipson responded by highlighting the government’s existing fuel duty decisions.
“I’m sure John Healey will be open to any and all suggestions ahead of the budget but actually this is an area where the Labour government has taken action on fuel duty already.”
Phillipson also placed the proposals in the context of the Liberal Democrats’ conference: “Whilst I recognise what the Lib Dems have to say on this topic, this is the element of politics about it – they’ve got their conference, they’re making their pitch, good luck to them.”
Her response did not commit the government to Davey’s proposed reduction. For drivers, the distinction remains between the existing freeze and the additional temporary relief the Liberal Democrats are seeking.
Frequently Asked Questions
What is Ed Davey proposing for fuel duty?
Ed Davey wants the government to cut fuel duty immediately by 10p a litre until Christmas. He also wants a permanent fuel duty increase scheduled for January to be scrapped.
How much could the proposed fuel duty cut reduce pump prices?
The Liberal Democrats claim a 10p-per-litre fuel duty cut would reduce pump prices by 12p a litre. That figure is the party’s estimate, not an announced reduction already in effect.
What other transport-cost reductions is Ed Davey seeking?
Davey is due to call for the bus fare cap to be cut from £3 to £1 and rail fares to fall by 10%. He also wants VAT removed from public electric-vehicle charging points and a review of network costs the Liberal Democrats have labelled unfair.
