George Osborne cancels fuel duty hike

Drivers enduring high petrol prices were given some respite by Chancellor George Osborne today.

He announced that the 3p fuel duty increase planned for January 2012 would be cancelled, while the 5p hike due in August 2012 would be only 3p higher than prices now.

Mr Osborne said millions used cars to go to work and to pick up children from school and for most people their vehicle was not a luxury but a necessity.

Having cut fuel duty by 1p in this year's Budget, Mr Osborne said that families would be saving £144 on filling up the average family car by the end of next year.

AA president Edmund King said: "The Chancellor has seen sense on this vital issue. Cash-strapped drivers will heave a heavy duty sigh of relief as current pump prices are close to the record high.

"This measure will not only be a relief to drivers but also to the high street as drivers have less to spend if more money is pumped into their tanks. It is still tough on the streets for many drivers but at least the Chancellor hasn't added to their pain. As the AA has been saying he understands that cars are a necessity and not a luxury."

Quentin Willson, spokesman for campaign group FairFuelUK, said: "This is a victory for us but only a stay of execution. We've saved the UK 9p since March in proposed fuel duty rises and we are now the gatekeepers of fuel sanity for this country.

"We're going to carry on pressurising this Government to keep duty down and reduce it significantly. If we don't, they'll hike it up again the first chance they get."

Professor Stephen Glaister, director of the RAC Foundation, said: "This is good news. Figures out today show transport is the single biggest area of expense for the average household, with £1 out of every £8 going on motoring.

"On paper, the scrapping of the 3p fuel duty rise in January will cost the Chancellor about £1.5 billion, but it will bring real respite to the nation's 34 million drivers and mean they can get out and contribute to economic growth, which should be good news for the Treasury."

PA