Tories new tax pledge over fuel prices

Tories new tax pledge over fuel prices

The Conservative Party has unveiled a radical new plan to soften the impact of future fuel price rises.

Shadow Chancellor, George Osborne has proposed a Fair Fuel Stabiliser that, he says, would reduce duty when fuel prices go up, and raise it when fuel prices go down.

If a Fair Fuel Stabiliser had been introduced at the 2008 Budget, fuel would now be 5p per litre cheaper, shaving £3.50 off a tank of fuel for a Ford Mondeo, claim the Tories.

But if, instead of rising, oil prices had fallen below the $84 forecast in the Budget, then fuel duty would have risen. In either case, forecast Government revenues would have been unchanged, said the Tories.

Mr Osborne described the stabiliser as: “A common sense plan to help families, bring stability to the public finances and help the environment by making the price of carbon less volatile.”

The idea is contained within a Conservative Party consultation document entitled ‘A Fair Fuel Stabiliser: A Consultation on the Future of Fuel Taxation’.

However, HM Treasury, according to national newspapers, dismissed the idea as ‘a dishonest’ stunt that would leave a £3 billion hole in the public finances - amounting to about 1p on the basic rate of income tax.

However, the AA backed the plan with president Edmund King saying that the motoring organisation suggested a similar system earlier this year.

(Conservative Party)