UK government extends fuel duty freeze and meets supermarket backlash over proposed food price caps

The UK Treasury announced a series of cost‑of‑living measures as the Middle East conflict pushes energy prices higher. A fuel‑duty freeze, originally due to end in September, has been extended to the end of 2026 and a 12‑month road‑tax holiday for haulage and logistics vehicles was introduced, saving operators up to £912 per vehicle. Red diesel duty for farmers and other agri‑diesel users was cut by more than a third until year‑end, the lowest rate in over 20 years. Chancellor Rachel Reeves also unveiled a “Great British Summer Savings” package that includes free bus travel for children aged 5‑15 during August, tariff reductions on over 100 food imports and a back‑dated rise in the tax‑free mileage allowance to 55p per mile for the first 10,000 business miles.

At the same time, Treasury officials have pressed major supermarkets to adopt voluntary caps on staple items such as bread, milk, eggs and butter, offering regulatory concessions – for example delayed healthy‑food rules and eased packaging taxes – in return. Industry leaders have rejected the idea, describing it as “1970s‑style price controls”, “pre‑posterous” and “idiotic”. M&S chief executive Stuart Machin, former Asda chairman Lord Stuart Rose, and the British Retail Consortium warned that caps would force retailers to sell at a loss and that the government should instead tackle the underlying cost pressures from energy, commodity and policy costs. The proposals echo a SNP manifesto pledge for price caps, prompting accusations that the UK government is copying the Scottish party’s plan.

The government maintains that no mandatory cap is being introduced, emphasizing ongoing dialogue with retailers while rolling out the broader cost‑of‑living support package.