12.11.2012 Pressure grows to delay 3p fuel duty rise

Labour are to force a vote in the House of Commons calling for the planned 3p increase in fuel duty, due to come into force in January 2013, to be delayed for three months.

If successful, this would be the second delay of the increase rise in fuel duty, the last being announced in June this year in response to increasing pressure on household budgets.

Rachel Reeves, the shadow chief secretary to the Treasury, is calling for a "three-month window" to ease the costs of motoring. Although the Chancellor, George Osborne, is rumoured to be considering a possible delay, which would be announced in his autumn statement on 5th December, Reeves notes that as: “we haven't heard any confirmation from George Osborne or the Treasury that they will indeed postpone this increase ... we are having the vote this evening".

She continues: "If the government can find the money to postpone it for longer then all the better because it is a big pressure and of course you've also got bus and train fares going up in January too, so the cost of getting to work for people — there's an issue about whether work pays for a lot of low-paid workers.

"[The consumer campaign organisation] Which? says a lot of people are dipping into savings now … Let's hope that by April next year, the economy starts improving, that the economy is growing, that wages start rising, that inflation starts coming down, because if those things are happening then some of these pressures are more bearable.

"At the moment you've got a situation where wages are not going up but the prices of food, the gas and electricity bills people are going to be getting this winter, the cost of transport, are all going up. When we were in government, we postponed fuel duty increases when the economy was weakened, when families were struggling, and that's what the government should do now."

Labour’s motion is supported by the campaign group FairFuelUK which maintains that the planned duty increase would raise only £800m, compared with Treasury projections that it would bring in £1.5bn. Its spokesman, the broadcaster Quentin Willson, said: "The momentum building up behind FairFuelUK's call to see this damaging 3p rise scrapped is becoming unstoppable.

"The Treasury appears to be listening. We welcome Labour pushing on this issue. Consumers are currently paying an eye-watering 80p per litre in combined fuel duty and VAT. This is socially unjust and adding another 3p in tax doesn't make sense for economic recovery and deficit reduction."

But Labour's hopes of winning the motion are likely to be dashed by a low level of support among Tory backbenchers for the Labour motion. While many support the case for a duty freeze and might rebel against the government on this issue if it was to go ahead, there are indications that the Coalition is already reconsidering the planned increase.

The Guardian