Sir Ed Davey is calling on the government to immediately cut fuel duty by 10p a litre until Christmas as part of a package of policies aimed at cutting the cost of living.

The Liberal Democrat leader is also urging the government to scrap a permanent increase in fuel duty which is set to take effect in January.

Fuel duty was frozen under the Conservatives in March 2022 and Sir Keir Starmer’s government continued the freeze, deciding in May to push back a planned 3p increase in September until the end of this year.

The Lib Dems claim cutting 10p from fuel duty now would mean fuel would drop by 12p per litre at the pump.

Sir Ed claimed drivers should be supported and a temporary three-month fuel duty cut would pay for itself by stimulating the economy.

“Petrol and diesel prices are higher than they’ve been for a long time because of Trump’s mad war with Iran, and people need help now,” he said.

The policy would cost about £2bn, he said, adding: “It’s a three-month package, a temporary package, but if you look at the extra money the government will get through the energy profits levy, from gas taxes, from VAT and fuel duty, it’s self-funding.”

In a speech to his party’s conference on Tuesday, Sir Ed will make further calls to cut the bus fare cap from £3 to £1, and reduce rail fares by 10%.

He will also call for VAT to be dropped from public charging points for electric vehicles and a review of network costs the Lib Dems have labelled unfair.

Chancellor John Healey is under pressure to raise taxes or cut spending at his Budget next month, amid soaring government borrowing costs.

Asked about Sir Ed’s call for a fuel duty cut, Labour Party chair Bridget Phillipson told Laura Kuenssberg: “I’m sure John Healey will be open to any and all suggestions ahead of the budget but actually this is an area where the Labour government has taken action on fuel duty already.

“Whilst I recognise what the Lib Dems have to say on this topic, this is the element of politics about it – they’ve got their conference, they’re making their pitch, good luck to them.”