Partner Article

3p fuel increase postponed by Government

Plans for a 3p increase in fuel duty have been postponed by the Government, following pressure from road user groups.

The rise, which was due to take place in August, will now happen in January next year, in a move which the Chancellor believes will benefit families and businesses.

Opposition has also come from Labour, the SNP, Plaid Cymru and MPs from other parties, who had threatened to force a commons vote on the issue. Several Conservative MPs were also said to be pushing for a u-turn.

Announcing the change, George 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 the 2011 Autumn Statement, Mr Osborne also cancelled a 3p rise scheduled for January 2012, but then pledged that a planned rise in August would still go ahead, but would be cut from 5p to 3p.

Labour have previously indicated that cost of delaying the increase until next January, which would total between £500 million and £600 million - would be covered by the underspend on the Olympics budget or closing tax loopholes and reversing changes to tax allowances.

Commenting on the announcement, Dr Neil Bentley, CBI Deputy Director-General, said:
“This decision will be welcomed by hard-pressed families and businesses across the country.

“A fuel duty freeze will help to support road hauliers and freight transport operators, making delivering our goods that bit more affordable, and supporting the economy during the challenging months ahead.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .