Relief for rural West as fuel duty rise ditched
Chancellor George Osborne has offered respite to hard-pressed Westcountry motorists by scrapping a planned 3p rise in fuel duty and freezing the tax for the rest of the year.
The unexpected announcement, which will cost £500 million, was welcomed by the region's MPs and rural campaigners who have warned the rocketing prices at the pumps are crippling communities in the countryside.
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Announcing the measure to cheers from Conservative benches in the Commons, Mr Osborne said fuel duty would now be 10p a litre lower than under the plans inherited from Labour.
"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," he said.
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The announcement followed a question from Sarah Newton, Tory MP for Truro and Falmouth, who was recently injured in a fall, who told Mr Osborne: "If I wasn't on crutches I would be jumping for joy."
She added: "This is particularly good news for small businesses who need to get their goods to markets upcountry, hard-working families and visitors to the region. Our pump prices in rural areas are much higher than in urban areas. This shows the Chancellor has listened to people in Cornwall."
The AA said deferring the 3.02p-a-litre increase in August until next year will spare a two-car family from a £6.41-a-month leap in petrol costs.
Had it gone ahead, from petrol sales alone it would have siphoned £1.6 million a day from consumer spending into the pump and knocked out a third of price cuts since the record highs in mid-April.
The August rise has now been deferred until January next year, at a one-off cost to the Exchequer of £550 million, Treasury sources said.
Barney White-Spunner, the executive chairman of the Countryside Alliance, said: "In March I described the car as an 'unaffordable necessity' for many rural families, because the cost of running a vehicle in the countryside has increased far beyond any rise in rural wages.
"So the Chancellor's decision to scrap the planned 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."
The boost to motorists can be paid as a result of departmental savings across Whitehall, the Treasury said.
Labour had urged Mr Osborne to scrap the rise, with shadow chancellor Ed Balls calling for the Government to use the £500 million underspend from the Olympics to fund the move.
But Treasury sources insisted Mr Osborne's announcement had been under consideration for some time.
David Laws, Liberal Democrat MP for Yeovil, said: "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.
"Economic conditions are tough, and we will do all we can to help families deal with the difficulties they face."
Ed Balls MP, Labour's Shadow Chancellor, in response to George Osborne's U-turn on fuel duty, said: "This is the fastest U-turn in history.
"With U-turns on petrol, pasties, caravans, charities and churches, George Osborne's Budget is now in tatters – a true omni-shambles of a Budget from a part-time Chancellor whose reputation is now badly damaged."
Comments
by Yesboy1
Thursday, June 28 2012, 8:28AM
“by the way
fuel to most of us- is affordable looking at all the cars around exbridge each morning!! travelling at around walking pace”
by Yesboy1
Thursday, June 28 2012, 8:26AM
“cheekyman
you are in cuckoo land if you think it is easier to live off the state- this is very insulting to the youth of today being put on the scrap heap with out chance of meaniful employment.
i hope you do go to the doctors and fake a neck injury - create an opportunity for someone else who would value what you have already!!”
by cheekyman_jr
Wednesday, June 27 2012, 4:21PM
“There's no relief when fuel is so expensive...it makes so little difference when you can just about afford to get to work nowadays...although I guess it does mean that I wouldn't have to go without food every month to make sure I could get to work...to pay for the fuel to get to work...
hmm...time to fake a neck injury and sponge off the state for the rest of my life...I certainly can't afford to work for much longer”
by 34Eric
Wednesday, June 27 2012, 4:01PM
“As the rise was meant as a green tax and was meant to take more of us off the road, then there shouldn't have been any increase in revenue.Unless these taxes don't work because we still have to get to work and back,32 miles a day in my case,and there is no alterative transport.”
by BOGOFF2
Wednesday, June 27 2012, 3:16PM
“Fantastic news !. A rise in January, just after Christmas when of course none us are eagerly awaiting our much needed wages ....”
by DBPvy
Wednesday, June 27 2012, 2:06PM
“I just love the way the politicians sit there, smiling and patting each other on the back because they haven't increased taxes. If they just dropped the increase and kept quite about it that would be one thing… but no… they have to warble on about how they are for working families and aren't we merciful and blah… blah… blah…
Useless bunch of incompetents.”
by josdave
Wednesday, June 27 2012, 12:42PM
“referee for all their rhetoric this government is borrowing more than Labour ever did and we still have zero or negative growth whichever value you want to believe.”
by Gurnards_Head
Wednesday, June 27 2012, 12:38PM
“Of course the Government can afford the drop in revenue if it also stops wasting money which it must do, we need smaller more effective less intrusive Government that gets the basics right and forgets the bells and whistles and micro management that merely drives up taxes and makes us all feel so put upon.
Needlessly taking taxpayers money, wasting most of it on administration before handing a few crumbs back as if some great philanthropic gesture is occuring is both dishonest and inneficient being largely responsible for the current mess we are in but for a time the client state it created bought into the fantasy of something for nothing.
Any decent caring society needs a basic safety net below which genuinely unfortunate citizens cannot fall, allied with a health service that functions well and law enforcement, defence and education systems that deliver exactly what is stated on the tin, anything more is superfluous and wasteful.
Those who work hard are the engines of a sound economy, the reasonable taxes they pay finance the entire system including the politicians wages, if they are soaked too hard it becomes counterproductive.
The Chancellor has had the good sense to back off several unpopular but more importantly unreasonable proposals recently, there is nothing wrong with a U turn if it then leads in the right direction.
Efforts must be redoubled to give fair and equitable tax treatment to the squeezed middle, those who freeload at the bottom must be reined in and those at the top end who can afford to pay experts to devise and operate legal tax fiddles to avoid their obligations should have no hiding place.”
by referee
Wednesday, June 27 2012, 12:37PM
“"Never look a gift horse in the mouth" Osborne one way or another is trying to create some growth so we don't become a basket case like Spain Greece etc. labour left us in the poor house which will take years to balance the books.”
by bombheads12
Wednesday, June 27 2012, 11:28AM
“It does seem weird that our "very own" Andrew George MP reckons that we cannot afford this drop in revenue and another MP Justine Greening wouldnt stand in the way of a fuel duty rise might i suggest they lose a few voters for the next election!”