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Fuel duty to be frozen

Fuel duty to be frozen
Fuel tax will be frozen until the end of the year, easing pressure on motorists, George Osborne revealed this afternoon.

Announcing the decision at Treasury Questions, the Chancellor said it had been made because the Government is "on the side of working families" and would be paid for by “lower than expected departmental spending".

He said: "We will now stop any rise in fuel duty this August, and freeze it for the rest of the year."

Treasury sources told PoliticsHome that the freeze means that fuel duty under the Coalition saves the average family £160 over 2 years when compared with Labour's planned rise. The one-off £500m cost is funded from larger than forecast savings in departmental spending.

A source close to the Chancellor indicated that the timing of the announcement was due to this being the last Treasury Questions before the planned rise in August, and it had been discussed with the Quad of the Prime Minister, Mr Osborne, Danny Alexander, and Nick Clegg a month ago.

Downing Street confirmed the issue had not been discussed in the Cabinet this morning, but corroborated that it had come up in a Quad discussion a month ago. The Prime Minister’s spokesman also played down the importance of the cost of the decision, saying it was a “relatively small percentage of total departmental spending”.

However Ed Balls, who earlier today backed the campaign against the planned 3p rise in August, questioned the timing of the announcement.

He told the Commons: "It’d be interesting to know at what point this morning the decision was made, and whether the transport secretary was even told.”

He later told BBC News it is the “fastest U-turn in history”, describing the Chancellor’s handling of the situation as “shambolic”.

Writing in today's Sun, the Shadow Chancellor announced his party would force a House of Commons vote on the issue, and said he would put forward an amendment to Budget legislation next week seeking to delay the increase until January, and urged Tory rebels to back him.

On ITV's Daybreak this morning, Mr Balls said introducing the tax in August would be "a real own goal" for the Coalition and suggested using money not spent on the Olympics to reverse the rise.

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