Darling 'playing roulette with fuel prices'

Motorists and air passengers were given bad news by Alistair Darling today.

No sooner had the Chancellor announced a 2.5 per cent cut in VAT on fuel than he effectively wiped out the reduction by saying he was increasing fuel duty.

And the Chancellor said he was carrying on, after all, with the Air Passenger Duty (APD) airport departure tax system, with those travelling further paying more.

But Mr Darling did say he would be phasing in the new rates of vehicle excise duty (VED) car tax with increases limited to £5 a vehicle in 2009 and the swingeing increases originally fixed for the more-polluting vehicles being drastically reduced.

Mr Darling also announced that rail would benefit from a share of an extra £535 million being brought forward by the Government, with 200 extra trains being provided.

In addition, motorway widening schemes will be paid for as part of a £3 billion capital spending package brought forward from 2011 to now.

AA president Edmund King said that on fuel prices Mr Darling was "giving with one hand and taking away with the other".

He went on: "Darling is playing roulette with global fuel prices and could lose his gamble. It is a very big gamble as there are 32 million motorists out there and most of them have a vote. If the global price of oil increases this hike may come back to haunt the Government."

The AA said it welcomed plans to increase capacity on the motorway network as congestion costs billions of pounds to business and individuals each year.