The biggest cheer from Tory backbenchers (and motorists) to George Osborne’s otherwise austerity-heavy Autumn Statement was his announcement to scrap the 3p-a-litre fuel duty increase planned for next month.
Before he stood up, most commentators had predicted that Mr Osborne would again postpone this rise, which would mean drivers filling an average tank would have had to fork out almost £2 more for petrol or diesel.
But instead he said he was not merely postponing the 3p rise until April 2013, but axeing it altogether. It means that the Chancellor has not raised petrol duty at all since coming into office.
Under Labour plans – accepted by the Coalition – petrol prices were due to rise every year under the automatic fuel escalator.
Mr Osborne has now cancelled two of these rises, and many expect him also to cancel two more duty rises that are due before the election.
It represents a victory for Tory campaigners, led by the MP for Harlow, Robert Halfon, who have argued that such increases are unacceptable to ordinary voters with petrol prices already at record highs.
Edmund King, president of the AA said: “In 20 years, UK motoring has cut its fuel consumption by 20 per cent but contributes 144 per cent more in fuel duty tax.
“Britain’s 35 million motorists each average about 7,000 miles a year. Cancelling this rise will save them a combined total of more than £1 billion annually, money which they can use to ease their financial headaches and help support the economy through their own spending.
“It’s not as if drivers aren’t already paying a huge amount in tax. Even without an increase, 60 per cent of the pump price goes to the Exchequer.”
But Friends of the Earth’s executive director Andy Atkins said: “Motorists will continue to pay a heavy price until we wean our cars off of their dependency on petrol and diesel.
“A few pence off fuel duty is simply tinkering under the bonnet. Ministers must completely overhaul their motoring strategy so we can have cleaner, cheaper transport in the future.”
Case study: Petrol freeze helps, but pay freeze hurts
Adrian Dummott, 38, is a paramedic from Corsham in Wiltshire
I was pleased about the scrapping of the hike in fuel duty as I have to drive around 50 miles a day to get to work so that’s quite a big issue for me and my family. I live with my two small boys and my wife, who also works in the public sector as a paramedic. The pay freeze over the past few years has been difficult for us, so while a one per cent pay rise is welcome, it means we’re still worse off in real terms. I suppose it’s better than nothing.
“I’m surprised that tax-free allowance on pensions wasn’t cut further – the annual allowance has dipped from £50,000 to £40,000 but I thought it would go down to around £30,000. I’m glad there’s talk of going after big businesses, but the cuts to benefits are a concern. I do wonder if there are enough jobs out there to penalise the unemployed. My sister is disabled, so I’m worried.
“The Government likes to suggest public sector workers are better off than the private sector, but that’s not the case. They’ve done a good job of demonising the public sector, as if we’re to blame for everything wrong with the country.”