Chancellor John Healey has pledged to keep a close watch on fuel retailers and supermarkets as the conflict in Iran feeds through into higher global energy prices, signalling that the new government is prepared to intervene if businesses exploit the crisis to raise prices unfairly.
Speaking days into Andy Burnham’s premiership, Mr Healey acknowledged that Britain could not fully shield households from the effects of another geopolitical shock, but insisted ministers would seek to prevent unnecessary price increases from compounding pressure on consumers.
“We’ll be watching closely for any suggestions that customers are being taken for a ride at the pump or the till,” he said, adding that regulators already possess the powers to tackle price gouging should evidence emerge. While he stressed there had so far been “no significant evidence” of companies exploiting the situation, the warning reflected growing concern over the inflationary consequences of instability in the Middle East.
The remarks underline the economic challenge confronting the new administration. Rising oil prices threaten to reverse recent progress on inflation just as the government seeks to convince voters it can ease the cost-of-living pressures that have dominated British politics in recent years.
Mr Healey said he had already held discussions with international counterparts about coordinating the economic response to the conflict. While conceding that “we can’t completely stop the squeeze” on families and businesses, he argued that ministers could soften the impact through active intervention and policies designed to improve Britain’s resilience to future shocks.
The Chancellor’s comments come as Mr Burnham places living standards at the centre of his early premiership. Since entering Downing Street, the Prime Minister has announced a temporary reduction in VAT on electricity bills, extended the £2 bus fare cap through 2027 and signalled that rail fares could be the next target for reform.
However, the growing list of spending commitments has intensified scrutiny of the government’s fiscal strategy. Mr Healey has insisted his first Budget, scheduled for October 28, will remain “built on fiscal discipline”, with departments instructed to fund new priorities by reallocating existing budgets rather than expecting additional Treasury support.
The balancing act facing the Chancellor is increasingly clear: cushioning households from external economic shocks while maintaining credibility with financial markets already alert to the mounting cost of the government’s domestic agenda.
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