3p Fuel Duty Hike Scrapped

Petrol PumpChancellor George Osborne has made another u-turn in the Budget by freezing fuel duty for the rest of the year. This means that the 3p per litre hike to be effective August 1 has been scrapped. The chancellor told the Commons that the tax will now be 10p per litre less than what it would have been if they had continued with the former Labour government’s plans. He said that they are on working families’ and businesses’ sides. This will fuel their recovery during such a difficult economic period for around the globe, he added.

Osborne noted that he had been considering the freeze for a while, and said this shows that the government is doing all it can in very hard economic circumstances. It follows Transport Secretary Justine Greening publicly defending the hike earlier this week on live BBC radio. She said on Monday that funding for the public services relied on by everybody is brought in by taxes, which fuel duty is a part of. It’s understood that Prime Minister David Cameron wasn’t notified of the decision until the announcement was made on Tuesday afternoon. His official spokesman said that tax is the chancellor’s matter, and the decision shouldn’t be unexpected. This government has listened to motorists’ concerns since coming into office.

The u-turn is good news for drivers, as fuel duty makes up 57.95p per litre of fuel prices. On top of this, VAT adds 20% – or about 24p at current prices. The decision will mean that the Treasury loses out on £500 million in tax earnings, but it says this will be paid from the money saved across Whitehall’s departments. Shadow Chancellor Ed Balls suggested that the £500 million saved from the cost of the Olympic Games should be used to fund the move.

Tory MP Sarah Newton reportedly told Osborne that she would be jumping for joy if she wasn’t on crutches (she was recently injured in a fall). Conservative MP Robert Halfon has led a campaign to freeze the duty hike and said that drivers throughout the country will welcome the decision, which will greatly improve the economy’s performance. Labour MP Jim Cunningham questioned Osborne as to why he didn’t announce the freeze when other u-turns in the Budget were revealed – like with charity and pasty taxes. The chancellor’s response was simply that the decision should be welcomed.

AA president Edmund King says this is great news for drivers, who will breathe a big sigh of relief with summer holidays around the corner. A fuel tax hike coinciding with the Olympics would have put a shadow over the country. Now they need fuel price transparency more than ever to make sure these benefits are passed entirely onto motorists. Freezing the duty rise until next year will spare a family with two cars from a £6.41 per month increase in fuel costs, he added.

Professor Stephen Glaister, the director of the RAC Foundation, said that this is great news for motorists and the nation. Since tax makes up about 60% of pump prices, declines in the cost of oil would have only gone so far in easing drivers’ financial burden. The country’s economy is powered by road transport, and Osborne’s recognition of the huge pressures on 35 million motorists as the biggest household expenditure is welcome.

FairFuelUK national spokesman Quentin Willson says that the government has, thankfully, listened and acted for the good of hard-pressed consumers throughout the UK. This is democracy at its best, where the government and chancellor review decisions and act with common sense and fairness. Hard-working families and businesses will breathe a sigh of relief for at least the rest of the year. He then gave every MP and minister who listened a ‘well done’.



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