LONDON, May 21 (Xinhua) -- British Chancellor of the Exchequer Rachel Reeves on Thursday announced a package of measures to support households and businesses facing higher costs linked to the war in Iran, including help with energy bills, fuel costs, food prices and summer spending.
In a statement to parliament, Reeves said the conflict in the Middle East posed "a significant challenge to the world economy," adding that the government had a duty to support families and businesses while responding responsibly to changing conditions.
The package includes a new 350-million-pound (470 million U.S. dollar) Critical Chemicals Resilience Fund to support strategically important producers facing high energy costs. Reeves also announced a separate 120-million-pound (161 million dollar) fund for Britain's ceramics sector to improve efficiency and reduce energy costs.
To help with transport and fuel costs, Reeves said the government would grant a 12-month road tax holiday for heavy goods vehicles, saving a typical truck up to 912 pounds (1,225 dollars). Duty on red diesel will be cut by more than one-third until the end of the year to support farmers and the rail freight industry. The tax-free mileage rate for workers will also rise by 10 pence per mile, backdated to April 2026.
Reeves confirmed that fuel duty would not rise this year, saying the decision reflected pressure on fuel prices caused by the war.
To ease food costs, the chancellor said the government would suspend tariffs on more than 100 food products sold in supermarkets. She said supermarkets were expected to pass the savings on "in full" to consumers. The Treasury estimated that the tariff cuts would bring more than 150 million pounds (202 million dollars) a year in benefits to consumers.
The government will also give regulators, including the Competition and Markets Authority, new powers to act against companies exploiting the current situation to make excess profits at consumers' expense, Reeves said.
For families, Reeves announced that bus travel across England would be free for children aged between 5 and 15 throughout August. The government has already extended the 3-pound (4 dollars)bus fare cap to March 2027.
She also launched what she called the "Great British Summer Savings" scheme, including a temporary cut in value-added tax from 20 percent to 5 percent on summer attractions during the school holidays. The cut will apply to adult and children's tickets for fairs, theme parks, zoos and museums, as well as children's tickets for cinemas, concerts, soft-play venues and theatres. VAT on children's meals in restaurants and cafes will also be reduced from 20 percent to 5 percent.
The measures will run from June 25, the start of the Scottish school summer holidays, to Sept. 1, the end of the school holidays in England, Wales and Northern Ireland.
The measures came as British households face renewed pressure from energy prices. Energy consultancy Cornwall Insight has forecast that a typical dual-fuel household bill could rise to 1,850 pounds (2,486 dollars) a year from the current 1,641 pounds (2,205 dollars).
