Rachel Reeves has been blasted for delivering “little more than a sticking plaster” to help families with the cost of living as she announced a cut in VAT on tickets for theme parks, zoos and museums over the summer holidays. VAT will be slashed from 20% to 5% from June 25 to September 1 as fears mount that inflation will surge as a result of Iran war. The household energy price cap is predicted to rise by £209 a year from July.

Sir Keir Starmer insisted the support would give families “a bit of breathing room”. Ms Reeves said her VAT cut would “apply to ticket prices for both adults and children, covering attractions such as fairs, theme parks, zoos and museums”. She added: “It will include children’s tickets for cinemas, concerts, soft play and the theatre. And it will cut the cost of children’s meals in restaurants and cafes from 20% VAT to 5% as well.”

Reform UK's Robert Jenrick said: "This is small change for families that are really struggling right now. We need radical reductions to the cost of living, not tinkering - starting by Reeves slashing taxes on energy bills. Right now the benefits bill is rising, record numbers of young people are out of employment, and the tax burden is at its highest level. Nothing Reeves said today will change that.”

Campaigners on both the Left and the Right of British politics urged the Chancellor to do much more to help people cope with price hikes.

John O’Connell of the TaxPayers' Alliance said: “Taxpayers will see right through this so-called ‘cost of living’ plan as little more than a sticking plaster from the Chancellor whose own policies have made life more expensive in the first place. While cutting VAT on summer attractions and suspending the fuel duty hike is welcome, it comes after Labour piled more costs onto employers through higher national insurance contributions and recklessly pursued the net zero agenda.

"If Reeves genuinely wants to improve the cost of living, she should start by lowering Britain’s crushing tax burden.”

Harry Quilter-Pinner of the IPPR think tank said: “The Chancellor is right to cut costs for families this summer, but the cost of living crisis demands much bolder action. The Government needs to wage an all-out war on bills. Ministers should show working people whose side the government is on by capping rents, using competition policy to tackle price gouging, and shifting the tax burden from work to wealth.”

The Chancellor's "Great British Summer Savings" scheme, which the Treasury estimates will cost around £300million, also includes free bus travel for children aged between five and 15 in England during the school holidays in August.

Other measures include a 10p per mile increase in tax-free mileage rates backdated to April, a £350million critical chemicals resilience fund and a £120million fund to help the ceramics sector, as well as the cutting of import tariffs on more than 100 types of food products.

The full package of measures comes at an estimated cost of £1.8billion over six years. The Treasury expects to boost revenues by changing the way oil and gas companies with overseas operations are taxed.

Ms Reeves said the reforms should “raise hundreds of millions of pounds a year”.

Flossie Boyd, a campaigner with the group Global Witness, welcomed the move, saying: “For too long the fossil fuel industry has been allowed to make outrageous profits and siphon billions of profit into tax shelters, while millions struggle with spiralling energy costs.”