27 June 2012

Chancellor postpones 3p fuel duty rise

The Chancellor George Osborne has postponed the 3p a litre fuel duty rise planned for August following pressure from road users' groups.

Osborne told MPs that fuel duty will be frozen for the rest of the year in a move that will cost the Government around £550 million.

The Treasury said the extra cost would be covered by greater than expected departmental savings across Whitehall.

Announcing the postponement of the duty rise, Osborne said: ‘We are on the side of working families and businesses and this will fuel our recovery at this very difficult economic time for the world.’

In last year's Autumn Statement the Chancellor cancelled a scheduled 3p rise in fuel duty for January this year. However, he confirmed that the rise planned for this August would go ahead - although it would be cut from 5p to 3p.

The Federation of Small Businesses (FSB) has welcomed the Government's decision to postpone August's fuel duty hike. ‘The 3p rise in fuel duty which was due in August was going to damage small firms that are already being crippled by the high cost of petrol,’ commented the FSB chairman, John Walker.

However, the shadow chancellor Ed Balls described Osborne as a ‘part-time, U-turning chancellor’ who would ‘not assume responsibility for his own decisions’.

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