Another Budget U-turn as Chancellor George Osborne scraps fuel duty increase
George Osborne added to a long list of Budget U-turns yesterday with a dramatic decision to scrap a planned 3p fuel duty rise which would have raked in £550 million for the Government.
The Chancellor’s announcement followed a high-profile campaign by MPs, motorists and business groups. The nationalist parties the SNP and Plaid Cymru intended to force a Commons vote on the issue.
Yesterday, after Labour officially joined the campaign, Mr Osborne caved in, adding to a series of U-turns, which included caravan tax, pasty tax and charity tax.
Yeovil Liberal Democrat MP David Laws welcomed the decision to delay the August tax increase – planned by the previous Labour government – until January 2013.
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He said: “The decision to scrap the extra petrol tax is good news and will provide some welcome respite for motorists and families who are trying to meet living costs.
"A 3p rise in petrol prices would have put more stress on households at a time when the Government is trying to ease the pressure on family budgets.”
The campaign was led by pressure group FairFuelUK, and the decision came a day after Wells Lib Dem MP Tessa Munt arranged a meeting between it and Chief Treasury Secretary Danny Alexander.
Founder Peter Carroll said he was grateful to the MP, a long-standing supporter of the campaign, for her help.
Quentin Willson, national spokesman of FairFuelUK, said they had argued that scrapping the fuel duty rise would be essential to the economic future of the country.
“Thankfully, the Government has listened and have acted for the good of struggling consumers across the UK,” he said.
Countryside Alliance boss Barney White-Spunner said the car had become an unaffordable necessity for many rural families.
He said: “The Chancellor’s decision to scrap the planned the rise in fuel duty is very welcome and a timely boost for the rural economy.
"Although times are tough in the countryside, where a car is an essential part of living, this freeze will go a long way to helping out hard-pressed rural motorists."
Shadow Chancellor Ed Balls claimed: “This is the fastest U-turn in history.”
He added: “With U-turns on petrol, pasties, caravans, charities and churches, George Osborne’s Budget is now in tatters – a truly omnishambles of a Budget from a part-time Chancellor, whose reputation is now badly damaged.”
Groups including the Road Haulage Association, the Federation of Small Businesses and the AA and RAC all welcomed the decision.
The Treasury said the move would cost £550 million, and be paid for as a result of savings by Whitehall departments.
Mr Osborne said fuel duty would now be 10p a litre lower than under the plans inherited from Labour.
He said: “We are in the side of working families and businesses and this will fuel our recovery at this very difficult time for the world.”
The coalition brought in a special 5p per litre discount on pump prices for remote areas, but the West missed out when it came into effect in March – it only applied to the Scilly Isles and some Scottish islands.