Government’s response to economic impact of Iran conflict is inadequate
The government’ response to the economic impact of the Iran conflict is not adequate, say leading audit, tax and business advisory firm, Blick Rothenberg.
Robert Salter, a director at the firm, said: “The measures the UK Government has taken so far in response to the Iran conflict are not enough for British businesses, workers and industries struggling with rising costs across the board.”
He added: “Although government has announced that the 5p increase in fuel duty will be delayed to 31 December 2026, fuel duty on red diesel used in farming and rail freight will be cut by over a third, and hauliers will receive a ‘holiday’ from vehicle excise duty for 12 months, none of these measures actually reduce the current high cost of fuel. According to the RAC per litre petrol is currently 158.73p and diesel 185.73p, with these prices likely to rise.”
Robert said: “Haulage companies are having to pass the higher cost of transporting goods to their clients, contributing to rising prices for consumers and businesses. Anyone who cannot work remotely, such as nurses, teachers and hospitality staff, is having to sacrifice more and more of their wages to get to work. Mandating that fuel prices can only increase once per day, as Germany has, would help British businesses, workers and industry adjust to fuel price increases.”
He added: “The UK government should also be looking at the £50bn in ‘green taxes’ that British firms pay each year, to see whether some of these taxes can be reduced temporarily, to help both businesses directly and the wider public with the cost of everyday living too. As reduced pressure in one area may help businesses lower prices, making the voluntary price freezes on goods in supermarkets more palatable for retailers.”
Robert said: “The increase in employer National Insurance Contributions (NIC) and National Minimum Wage (NMW) as set out in the 2025 Autumn Budget has pushed up costs for businesses. It has led to a cut in the number of entry level roles available, making it harder in particular for young jobseekers to find work. Reducing the rate of NIC would help businesses, job seekers and the overall economy.”
He added: “Although the most recent data from the Office of National Statistics (ONS) shows that the unemployment rate dropped to 5%, this does not show the full impact of the Iran conflict and the effect that this is having on company confidence. ‘Open vacancy’ statistics for the most recent period suggests that vacancies are continuing to fall with 54,000 fewer open positions in April 2026 compared to the position in April 2025. Meaning that already, businesses are choosing to hire less employees.”
Robert said: “Oil is not only used for fuel. British industry is facing higher costs for fertiliser, plastic production and lubricants. The strait of Hormuz is not only a vital supply chain link for oil; it also transports pharmaceutical ingredients – causing medication prices to rise. Freezing fuel duty does not tackle the cost increases associated with supply shortages.”
He added: “Although managing price increases due to a major global supply chain breaking down is not easy, stockpiling more oil and other supplies in anticipation of such an event would have helped stagger cost increases and prevent shortages. Currently as a member of the International Energy Agency, the UK is legally obligated to hold minimum stockpile of 90 days of net oil imports. The Iran conflict has lasted for 83 days so far.”
Robert said: “The government must do more to support workers, businesses and industry, or the anaemic growth and perhaps even recession, that the Organisation for Economic Co-operation and Development (OECD) recently forecast for the UK economy will become a painful reality for the British public.”