By Alistair Smout and Muvija M
LONDON, May 21 (Reuters) - British finance minister Rachel Reeves on Thursday announced measures aimed at lowering the cost of living for consumers over the school summer holidays and supporting industries hit by the fallout from the Iran war.
U.S.-Israeli strikes on Iran in February have driven up energy prices, dealing a blow to Prime Minister Keir Starmer's efforts to help households struggling with the cost of living.
With Starmer under intense pressure from challengers
within his Labour Party, Reeves unveiled a temporary cut in the rate of sales tax for some tourist attractions over the summer to 5% from 20%, adding that bus travel would be free for children under 15 in August.
She also said that Britain would suspend import tariffs on dozens of types of food products including biscuits, chocolate and nuts.
"I met with supermarkets to urge them to do all they can to keep prices low," Reeves said after a row over whether retailers would face price caps on key goods.
"I expect supermarkets to pass these savings (from tariff reductions) on in full to their customers."
She said the measures would be paid for by an acceleration of planned changes to the way that Britain taxes international oil and gas groups.
POTENTIAL TEMPORARY SUPPORT FOR BUSINESSES
Britain's regulated utility bills and previously announced measures to lower energy costs for households helped to keep a lid on inflation in April, but price growth is expected to rise to around 4% in the coming months.
"We stand ready to act if (energy) market conditions worsen significantly later this year," Reeves said, adding she had been "leading cross-government contingency work on design of potential future targeted and temporary support for businesses."
She said that the chemicals and ceramics industries - major energy-intensive sectors - would get support packages.
A survey showed earlier on Thursday that British companies are suffering their most widespread drop in activity in over a year due to political uncertainty at home and the fallout from the Middle East conflict.
The government said on Wednesday that a cut in fuel duty for transport, which had been due to expire in September, would be extended to the end of the year, alongside other measures to help hauliers and drivers.
In March, Starmer set out a £53 million ($71.25 million)package for the most vulnerable households which rely on heating oil for their homes.
($1 = 0.7439 pounds)
(Reporting by Alistair Smout and Muvija M, additional reporting by Sarah Young and Sam Tabahriti; Editing by Emelia Sithole-Matarise)
