Keir Starmer is engaging in discussions with industry leaders today to address the turmoil in the Middle East, as more nations take steps to alleviate the strain on motorists.
The Prime Minister is convening with executives from the energy, shipping, and financial services sectors amid growing concern over the repercussions for UK citizens.
Some experts in these industries are warning that the impact of the ongoing US-Israel conflict and Iran’s blockade of the Strait of Hormuz might surpass the economic turmoil of the 1970s, which led to a global recession.
There is a growing fear that diesel shortages could emerge in the weeks ahead as disruptions begin to affect supply chains. Brent Crude prices surged overnight following hints from Donald Trump about the potential deployment of ground troops to seize a strategic Iranian island.
In response, Australia has announced a temporary reduction in petrol duties at the pump, cutting them by half for three months. This move follows similar actions by Ireland, Spain, and Poland.
However, the UK government has so far resisted calls to implement similar measures and has not halted a planned increase in fuel duty set for September.
Keir Starmer is holding talks with business leaders on the Middle East chaos today – as more countries act to ease the pain on drivers
Alongside Sir Keir’s ’round table’, Rachel Reeves is having discussions with G7 counterparts later.
She will plead for countries to avoid ‘protectionism’, amid concerns that Britain’s energy imports could be choked off by hoarding of oil and gas supplies.
Sir Keir’s meeting will hear an update on the Middle East situation from Major General Richard Cantrill, the UK’s maritime operations commander.
The Royal Navy is fitting the transport ship RFA Lyme Bay with minehunting drones, understood to be a move intended to provide ministers with options for securing the Strait if fighting eases.
Downing Street said the aim of the meeting was to hear directly from businesses and discuss how the Government and private sector can work together in responding to the conflict.
With oil prices spiking and Iran continuing to blockade the vital Strait of Hormuz, Britain is now expected to face higher inflation and lower growth.
Petrol prices have already risen sharply, while disruption to the global oil supply has seen some developing countries impose restrictions on fuel usage and sparked concern shortages could spread to the UK.
Ministers have consistently played down the possibility of fuel shortages, with Education Secretary Bridget Phillipson telling broadcasters yesterday that drivers should fill up their cars as normal.
Ms Reeves is expected to urge her counterparts to follow the UK’s lead and accelerate the transition away from fossil fuels, arguing this is the only way to get off the ‘rollercoaster’ of international oil and gas markets and cut bills for good.
She will stress the importance of the G7 working together to maintain pressure on Russia, which is set to benefit from the higher oil price.
Earlier this month, Mr Trump eased US sanctions on Russian oil in a bid to reduce pressure on global markets.
In contrast to Ms Reeves’s call to move away from fossil fuels, the Tories are stepping up calls for the UK to drill for more oil and gas in the North Sea.
Kemi Badenoch has also demanded a cut in VAT on domestic energy bills and the scrapping of green taxes on power generation, saying that could cut bills by £200.
Ireland has cut duty on diesel by 15 cents and petrol by 13 cents until May 30.
The Spanish government is reducing VAT on fuel from 21 per cent to 10 per cent.
Poland has cut both VAT and excise duty at the pumps.
Rachel Reeves will plead for countries to avoid ‘protectionism’, amid concerns that Britain’s energy imports could be choked off by hoarding of oil and gas supplies
Speaking to the Financial Times overnight, Mr Trump said he could ‘take the oil in Iran’ or consider seizing control of Kharg Island, the country’s primary oil export hub.
‘To be honest with you, my favourite thing is to take the oil in Iran but some stupid people back in the US say: ‘Why are you doing that?’ But they’re stupid people,’ he said.
He added: ‘Maybe we take Kharg Island, maybe we don’t. We have a lot of options.’
However, Mr Trump acknowledged that doing so would require the US to remain in Iran ‘for a while’.
