Inside Reeves’ cost of living plan which could see UK consumers save more than £150 million a year

Rachel Reeves is set to unveil a package of measures aimed at easing the cost of living crisis, including cuts to import tariffs that could reduce prices of everyday goods such as biscuits and chocolate.

The Chancellor’s proposals are expected to save consumers over £150 million annually through tariff reductions across more than 100 types of products.

Other initiatives include the ‘Great British Summer Savings’ programme, which will offer free bus travel to children across England during the August school holidays.

Ms Reeves is scheduled to detail those policies in the House of Commons on Thursday, touching on economic pressures exacerbated by Donald Trump’s war in the Middle East.

However, no immediate aid is expected for rising energy bills.

The household energy price cap is expected to rise by £209 a year from July as a result of increases in global oil and gas prices following the closure of the Strait of Hormuz.

While Ms Reeves could outline contingency plans, a comprehensive package of targeted support for households during the winter months, when energy consumption peaks, is not expected until September.

The plan to suspend tariffs on some food imports is part of the Government’s wider efforts to combat rising prices.

The full list of products will be published next week, but it is expected to include biscuits, chocolate, dried fruit and nuts.

Prime Minister Sir Keir Starmer said: “We know many hard-working families are still feeling the pressure and often feel they need to hold back.

“By giving every child a free bus ride throughout August and reducing tariffs on daily food items, we are putting money back into people’s pockets and making life a little easier.

“This government is now focusing on practical steps to help – easing pressure on household budgets, supporting parents during school holidays and supporting British businesses.”

The free bus travel scheme will allow every child aged 5 to 15 in England to travel on participating local routes.

The Chancellor is committing more than £100 million to fund the free ticket scheme and support bus services facing rising costs.

Ms Reeves said: “My number one priority is to protect households from rising costs.

“I want every family to be able to have fun this summer, which is why we’re launching the UK Summer Savings Scheme and why we’re helping children with free bus travel throughout August.

“While the war in Iran is driving up prices at home, my economic plan is correct. I will continue to make the right choices to protect households and businesses and build a stronger and more secure Britain.”

The latest package comes after the Government announced an extension of the 5p cut in fuel duty until the end of the year, along with tax cuts for hauliers and help with red diesel costs for farmers.

Consumer Price Index (CPI) inflation fell to 2.8% in April from 3.3% in March, the lowest level since March 2025, the Office for National Statistics (ONS) said.

But this was largely due to regulator Ofgem lowering the energy price cap by 7%, or £10 a month, from the beginning of April for the average household using both electricity and gas; This has been brought down by the Government’s measures to reduce bills.

Inflation is expected to rise again as conflicts in the Middle East lead to fuel price hikes and the energy price cap will rise significantly from July as of the next update.

Energy analyst Cornwall Insight’s forecast for Ofgem’s July to September cap currently stands at £1,850 for a typical dual-fuel household; This represents a 13% increase over April’s annual cap of £1,641.

Ministers are wary of a Liz Truss-style universal bailout of all households, warning that unfunded benefits could trigger a rise in government borrowing costs and inflation, leading to higher mortgage rates, which could leave people worse off.