Wednesday July 16, 01:45 PM
2p Rise In Fuel Duty On Hold
By Sky News
The 2p rise in fuel duty which was due to take effect in October has been postponed. Chancellor Alistair Darling said the decision would help motorists and businesses "get through what is a difficult time for everyone".
He said: "This
measure is taken in response to sharp rises in world commodity prices, with the price of oil almost doubling over the past year to reach a real-terms record high of $146 a barrel recently.
"This has inevitably had significant knock-on effects on the price of road fuels, which the Government is committed to taking into account when considering decisions on fuel duties."
Mr Darling told Sky News: "The House of Commons is about to rise for the summer. It's clear to me that rising oil prices are affecting motorists and businesses so I've chosen to make the decision now."
Sky's Joey Jones said: "Had Darling decided to force this through he would have faced a public backlash, and a backlash from Labour backbenchers.
"As a result of this decision, however, there is little room for manoeuvre in the Government's finances," he added.
The Lib Dem Treasury spokesman Vince Cable said the Government would now have to find another £1bn a year from somewhere else.
"There is an absence of any consideration of the implications for the budget," he told Sky News.
The Freight Transport Association said it was "very good news".
Geoff Dossetter told Sky News: "This is extremely welcome. It will save our members £280m a year.
"Long term, however, we need to find a different way of taxing commercial vehicles. We would like to see fuel duty drop."
The RAC also said the Government should reduce fuel duty while Roger King from the Road Haulage Association said: "We think while oil prices remain so high there should be no increase in fuel duty at all."
Sky's business correspondent Joel Hills said: "The Government must be quietly hoping the price of oil will get so high that it has to come down."
Main road fuel duty rates will remain at 50.35 pence per litre after 1 October this year.
Planned increases in road fuel gases, biofuel duty rates and rebated oils rates will also be postponed.
The delay will be reviewed again in six months time.
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