Cash-strapped drivers promised Budget relief
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Motorists hit by the soaring cost of petrol could be spared the 1p a litre rise in fuel duty due to come into force in April.
Sharing the pain of rising oil prices between the Treasury and the motorist through the ?fair fuel stabiliser? is also still being considered, it was confirmed yesterday.
Cancelling the 1p tax increase would cost the Treasury around ?600million in the next financial year at a time of acute belt-tightening in the public finances.
George Osborne at the Jaguar Land Rover plant in Solihull today
The Chancellor has hinted he could scrap the 1p fuel duty rise
But Chancellor George Osborne is planning to help cash-strapped motorists either by scrapping the rise or by reforming the fuel tax system through the stabiliser.
While a cancellation of the 1p rise would be welcome, it would save the driver of an average family saloon with a 50-litre tank only 50p per fill-up, and do little to address the longer-term issue of ever-higher prices.
However, Mr Osborne is determined to use his Budget on March 23 to respond to public disquiet about petrol prices and head off threatened fuel protests by hauliers.
The proposal for a fair fuel stabiliser, championed by David Cameron, had looked dead and buried earlier this week when Robert Chote, head of the new independent economic watchdog, branded it unworkable.
But Government sources said there was a good chance that a new system, where the rate of duty would be cut as oil prices rise and increased as they fall, could work.
Unconvinced: Business secretary Vince Cable said the Government were cautious over the case for a fuel stabiliser
A strong possibility, one source said, is that the Chancellor will announce he is scrapping the 1p rise and allowing more time for the Treasury to draw up the fair fuel stabiliser.
Officials close to the Chancellor said the scheme would ?not be technically difficult to implement?.
But they say there are risks about the long-term impact on the public finances at a time when the Government needs every penny of income it can find.
In a sign of tensions within the Coalition, Business Secretary Vince Cable told reporters at Westminster that while a fuel stabiliser ?could be made to work? it would be difficult, ?because what is the price around which you set the ups and downs (of the oil price)?? He added: ?There are real technical difficulties in operating such a system.?
He also sounded doubtful about Mr Osborne?s suggestion that the fuel duty rise for April could be postponed. The Business Secretary said: ?Any attempt to change the duty system would be expensive.? He added that the Government had to exercise ?budgetary discipline?.
Ministers have come under pressure from motorists to act as the cost of a litre of unleaded has soared to almost ?1.30 thanks to high global oil prices and this month?s VAT rise to 20 per cent. Fuel duty already eats up 58.95p for every litre, on top of VAT of more than 20p.
Asked if he could do anything about the planned rise in duty, Mr Osborne told the BBC: ?We can override it, we are looking at that.? Confirming that relief for motorists would be announced in the Budget, the Chancellor added: ?If we are able to do something about it we will do it before April.?
He also said ministers were looking into the idea of a fuel stabiliser, which would mean ?the Government steps in to try to protect people from the effects? of volatility at the pumps.
Tax experts in the Treasury fear that were the oil price to remain high for several years, the loss of income to the Exchequer could be severe and would not be counterbalanced by the extra income during a period of lower prices.
Edmund King, president of the AA, said: ?Many drivers have reached breaking point. Should the Government go ahead with scrapping the fuel duty increase in April, it shows that it understands the plight of millions of drivers.?
Public doubts about Ed Miliband are damaging Labour?s election prospects, a poll warned last night.
The Ipsos Mori survey found that while 45 per cent of people said they ?liked? the Labour Party, only 36 per cent delivered the same verdict on its leader.
David Cameron was liked by 47 per cent of the public, but only 17 per cent felt the same about the Tory Party.
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Fuel hope: Osborne considers scrapping 1p rise in duty to ease pressure on struggling drivers | Mail Online
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Motorists hit by the soaring cost of petrol could be spared the 1p a litre rise in fuel duty due to come into force in April.
Sharing the pain of rising oil prices between the Treasury and the motorist through the ?fair fuel stabiliser? is also still being considered, it was confirmed yesterday.
Cancelling the 1p tax increase would cost the Treasury around ?600million in the next financial year at a time of acute belt-tightening in the public finances.
George Osborne at the Jaguar Land Rover plant in Solihull today The Chancellor has hinted he could scrap the 1p fuel duty rise But Chancellor George Osborne is planning to help cash-strapped motorists either by scrapping the rise or by reforming the fuel tax system through the stabiliser.
While a cancellation of the 1p rise would be welcome, it would save the driver of an average family saloon with a 50-litre tank only 50p per fill-up, and do little to address the longer-term issue of ever-higher prices.
However, Mr Osborne is determined to use his Budget on March 23 to respond to public disquiet about petrol prices and head off threatened fuel protests by hauliers.
The proposal for a fair fuel stabiliser, championed by David Cameron, had looked dead and buried earlier this week when Robert Chote, head of the new independent economic watchdog, branded it unworkable.
But Government sources said there was a good chance that a new system, where the rate of duty would be cut as oil prices rise and increased as they fall, could work.
Unconvinced: Business secretary Vince Cable said the Government were cautious over the case for a fuel stabiliserA strong possibility, one source said, is that the Chancellor will announce he is scrapping the 1p rise and allowing more time for the Treasury to draw up the fair fuel stabiliser.
Officials close to the Chancellor said the scheme would ?not be technically difficult to implement?.
But they say there are risks about the long-term impact on the public finances at a time when the Government needs every penny of income it can find.
In a sign of tensions within the Coalition, Business Secretary Vince Cable told reporters at Westminster that while a fuel stabiliser ?could be made to work? it would be difficult, ?because what is the price around which you set the ups and downs (of the oil price)?? He added: ?There are real technical difficulties in operating such a system.?
He also sounded doubtful about Mr Osborne?s suggestion that the fuel duty rise for April could be postponed. The Business Secretary said: ?Any attempt to change the duty system would be expensive.? He added that the Government had to exercise ?budgetary discipline?.
Ministers have come under pressure from motorists to act as the cost of a litre of unleaded has soared to almost ?1.30 thanks to high global oil prices and this month?s VAT rise to 20 per cent. Fuel duty already eats up 58.95p for every litre, on top of VAT of more than 20p.
Asked if he could do anything about the planned rise in duty, Mr Osborne told the BBC: ?We can override it, we are looking at that.? Confirming that relief for motorists would be announced in the Budget, the Chancellor added: ?If we are able to do something about it we will do it before April.?
He also said ministers were looking into the idea of a fuel stabiliser, which would mean ?the Government steps in to try to protect people from the effects? of volatility at the pumps.
Tax experts in the Treasury fear that were the oil price to remain high for several years, the loss of income to the Exchequer could be severe and would not be counterbalanced by the extra income during a period of lower prices.
Edmund King, president of the AA, said: ?Many drivers have reached breaking point. Should the Government go ahead with scrapping the fuel duty increase in April, it shows that it understands the plight of millions of drivers.?
Public doubts about Ed Miliband are damaging Labour?s election prospects, a poll warned last night.
The Ipsos Mori survey found that while 45 per cent of people said they ?liked? the Labour Party, only 36 per cent delivered the same verdict on its leader.
David Cameron was liked by 47 per cent of the public, but only 17 per cent felt the same about the Tory Party.
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Fuel hope: Osborne considers scrapping 1p rise in duty to ease pressure on struggling drivers | Mail Online
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