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Government cancels planned 3p fuel duty increase | Government cancels planned 3p fuel duty increase |
(39 minutes later) | |
The government will not go ahead with a 3p-a-litre rise in fuel duty in August, Chancellor George Osborne has announced. | The government will not go ahead with a 3p-a-litre rise in fuel duty in August, Chancellor George Osborne has announced. |
The move follows a campaign by road users' groups, who argued the change, announced in the Budget, would damage the economy. | The move follows a campaign by road users' groups, who argued the change, announced in the Budget, would damage the economy. |
Fuel duty will be frozen for the rest of the year, the chancellor told MPs. | Fuel duty will be frozen for the rest of the year, the chancellor told MPs. |
Labour had threatened to force a House of Commons vote on the issue. | Labour had threatened to force a House of Commons vote on the issue. |
Mr 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." | Mr 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." |
The government was "doing everything we can in very, very difficult economic circumstances", he added. | The government was "doing everything we can in very, very difficult economic circumstances", he added. |
The chancellor also told the Commons: "The one-off cost of this change will be fully paid for by the larger-than-forecast savings in departmental budgets." | |
'Difficult decisions' | 'Difficult decisions' |
In last year's Autumn Statement Mr Osborne cancelled a scheduled 3p rise in fuel duty for January this year but said another planned rise this August would proceed - although it would be cut from 5p to 3p. | In last year's Autumn Statement Mr Osborne cancelled a scheduled 3p rise in fuel duty for January this year but said another planned rise this August would proceed - although it would be cut from 5p to 3p. |
BBC political editor Nick Robinson said the chancellor had responded to pressure from some Conservative MPs and The Sun newspaper - in which Labour's Ed Balls had an article on the subject on Tuesday - who have called for the planned rise to be dropped. | BBC political editor Nick Robinson said the chancellor had responded to pressure from some Conservative MPs and The Sun newspaper - in which Labour's Ed Balls had an article on the subject on Tuesday - who have called for the planned rise to be dropped. |
Labour had called for the increase to be delayed until next January, saying the cost - between £500m and £600m - could be covered by the underspend on the Olympics budget or by closing tax loopholes and reversing changes to tax allowances for pension contributions for those earning more than £150,000. | |
In the Commons, Mr Balls told the Commons that Mr Osborne was a "part-time, U-turning chancellor" who would "not assume responsibility for his own decisions". | |
But Mr Osborne said road users would be paying 10p a litre more in taxation had Labour still been in power. | |
Last week Prime Minister David Cameron said the planned duty rise would be "looked at", but held out little hope for a delay, saying: "I think people sitting at home know that the government doesn't have a bottomless pit of money." | Last week Prime Minister David Cameron said the planned duty rise would be "looked at", but held out little hope for a delay, saying: "I think people sitting at home know that the government doesn't have a bottomless pit of money." |