Rachel Reeves is set to cut food costs and offer free children’s bus fares in a fresh batch of measures aiming to ease the cost of living crisis and impact of the Iran war on the UK.
Staples such as biscuits, chocolate and baked beans could become cheaper as the government slashes import tariffs on more than 100 types of product, in a move which could save consumers a combined £150 million per year.
The chancellor will also announce on Thursday a “Great British Summer Savings” scheme, including free bus travel for children in England during the school holidays in August.
The free bus travel scheme will allow every child aged five to 15 in England to travel on participating local routes.
“My number one priority is protecting households from rising costs,” the chancellor said, although the government is not expected to announce immediate help with rising energy bills.
There had been speculation over whether the government could cap supermarket food prices, but these suggestions were met by heavy opposition from the industry and from Bank of England governor Andrew Bailey, who said it would be “unsustainable”.
Bus fare scheme will help children travel for free over summer holidays
The free bus travel scheme will allow every child aged five to 15 in England to travel on participating local routes.
The Chancellor is committing more than £100 million to fund the free fares scheme and to support bus services facing increased costs.
Ms Reeves said: “My number one priority is protecting households from rising costs.
“This summer I want every family to be able to enjoy themselves, that’s why we’re launching the Great British Summer Savings Scheme, and why we’re helping kids with free bus travel throughout August.
“As the war in Iran pushes prices up at home, my economic plan is the right one. I will continue to make the right choices, to protect households and businesses, and build a stronger and more secure Britain.”
Rachel Reeves to announce cheaper food in cost-of-living package
Shoppers could save on the cost of biscuits and chocolate as part of a package of measures being set out by Rachel Reeves to ease the impact of the Iran war.
The government is cutting import tariffs on more than 100 types of product in a move that is expected to save consumers more than £150 million a year.
The chancellor also set out a “Great British Summer Savings” scheme, including free bus travel for children in England during the school holidays in August.
In the Commons on Thursday, Ms Reeves will give details of policies to tackle the cost-of-living squeeze triggered by Donald Trump’s war in the Middle East but is not expected to announce immediate help with rising energy bills.
The household energy price cap is predicted to rise by £209 a year from July after the closure of the Strait of Hormuz pushed up global oil and gas prices.
Ms Reeves may set out more details of her contingency planning but she is expected to wait until September before finalising any package of targeted support for households over the winter months, when more energy is used.
Comment: Starmer had an impossible choice over Russian oil – and got it wrong
Ukraine will pay the price, writes Sean O’Grady:
Starmer had an impossible choice over Russian oil – and made the wrong one
Betrayal is not too strong a term for the government’s decision to relax its ban on the import of Russian-origin oil products such as jet fuel – and it is Ukraine that will pay the highest price, says Sean O’GradyJane Dalton21 May 2026 07:00
Ukrainian MP: Lifting sanctions puts ‘question mark’ over UK friendship
.jpeg?trim=0,435,0,435&width=1200&height=800&crop=1200:800)
Ukrainian MP: Easing Russian sanctions puts ‘question mark’ over friendship with UK
The Ukrainian MP said the decision told Russia that ‘everything can be bought and everything is for sale’Jane Dalton21 May 2026 06:00
UK announces £3.7bn-a-year trade deal with Gulf states
UK announces trade deal with Gulf states worth £3.7bn a year
The UK has become the first G7 country to strike a free trade deal with the bloc of six Gulf statesJane Dalton21 May 2026 05:00
We may have cut interest rates twice this year if not for Iran war – Bank chief
UK interest rates may have been cut twice this year were it not for the Iran war, the Bank of England’s chief has said, as he warned that potential supermarket price controls were “not sustainable” in the long run.
Bank governor Andrew Bailey told MPs on the Treasury Committee that inflation also may have fallen to its 2% target level last month but the energy shock was keeping the cost of living higher.
The conflict has been the “dominating change in the landscape” for the economy, he said.
Mr Bailey added: “It was a reasonable expectation prior to this all happening that we would probably cut once or twice this year, the market was pricing that.
“The market isn’t pricing that now and effectively that was taken off the table.”
Watch: Could a supermarket food price cap help with the cost of living? We asked shoppers
Comment: Why the UK doesn’t need Soviet-style price caps
You can’t sustain lower prices without going bust, writes James Moore:
Why the UK really doesn’t need Rachel Reeves’s Soviet-style price caps
If the government wants to cut prices, it has the means to. Cut taxes and red tape and the cost of food will fall, says James MooreJane Dalton21 May 2026 01:00
Britons oppose loosening sanctions on Russian oil
New YouGov polling finds that 49% of Britons oppose loosening sanctions on Russian oil, compared to 19% who support it.
However, when asked which is the greater priority, more Britons say keeping fuel prices down (42%) than maintaining the strength of sanctions (32%).
Comment: One bad policy after another
Devising two terrible new policies in one day suggests Keir Starmer’s government has finally lost the plot, says John Rentoul:
Was this the moment Labour began to panic?
Lifting sanctions on Russian oil, putting price caps on supermarkets… two truly terrible new policies in one day suggest that Keir Starmer’s government has finally lost the plot, says John RentoulJane Dalton20 May 2026 23:40NewerOlder