3p fuel tax rise scrapped in another Coalition U-turn

Posted on 27 Jun 2012

Chancellor George Osborne executed another trademark U-turn yesterday - scrapping the Government's proposed 3p rise in fuel tax.

The U-turn is another embarrassment for the Government, after several others have made it a Coalition trend of sorts.

Sources inside the Treasury defended the move, saying that the rise was a policy put in place by the previous Labour administration, and that the £550m hole in revenues would be plugged by lower departmental spending.

Shadow Chancellor Ed Balls jumped to attack Mr Osborne, claiming that the U-turn was “the biggest in history.”

“Labour called for this help for families and businesses this morning and I welcome the fact the Chancellor backed down this afternoon,” he added.

A spokesman from the RAC Foundation welcomed the news: “Road transport powers the nation’s economy and [we are pleased] that the Chancellor recognises the huge pressures the country’s 35 million drivers are under with transport being the biggest single area of household expenditure.”

The president of the AA, Edmund King, also expressed his relief – saying that an increase in fuel costs would have “cast a shadow” over the Olympics.