Brown defends fuel duty decision

Brown defends fuel duty decision

Gordon Brown has defended a decision to postpone a 2p rise in fuel duty after David Cameron suggested it was timed to coincide with next week's by-election.

The prime minister said the move, which comes as oil prices continue to hit new peaks, would help people facing high food and fuel bills.

But the Conservative leader asked if it had "anything to do with the Glasgow East by-election".

Mr Brown said it was right to announce it before the Commons' summer break.

The price of unleaded petrol has risen 25% over the past year and pressure has been mounting for duty to be cut.

The announcement was made by Chancellor Alistair Darling ahead of a Conservative-called debate on fuel duty set to take place in the Commons later.

At prime minister's question time, Mr Cameron said: "The government announced today that after months of dithering it is scrapping the 2p tax rise on fuel.

"Can you tell us whether this decision had anything to do with the Glasgow East by-election?"

Mr Brown replied: "It is right to announce, as we have done previously, a decision before the House rises (for the summer break)."

He said the government would "continue to help hard-pressed families who are facing high fuel bills and high food prices because of what is happening in every country in the world....

"And in recognition of the problems that people face with petrol, we are freezing the duty of petrol for the full year. And we will bring forward further measures to help families in due course."

The prime minister's spokesman said there were "lots of precedents" for announcements on fuel duty to be made before the parliamentary summer recess.

He said Mr Darling "decided to do it now because he wanted to end any uncertainty".

The RAC welcomed Mr Darling's announcement, but said: "It does not go far enough. We would like to see the chancellor not just postpone future rises but actually cut fuel duty."

AA president Edmund King said: "We are delighted that the chancellor has seen common sense. Many motorists have endured months of misery and this is a welcome piece of good news for them."

Kate Gibbs, of the Road Haulage Association, said anything that helped the road haulage industry was "good news" although the postponement of the fuel duty rise represented "quite a small drop in the ocean".

But Lib Dem treasury spokesman Vincent Cable said: "There's absolutely no reason why the chancellor should have been stampeded into making this decision and we have no indication how it's going to be paid for."

The Institute for Fiscal Studies estimates today's fuel duty decision leaves the Exchequer £550m worse off, and brings the total cost of freezing fuel duty this year to £1.1bn.

The decision to postpone the rise was disclosed in a response to a parliamentary question tabled by a Labour backbencher.

Mr Darling told the BBC News Channel it was clear that oil prices were going to remain "high for some time yet"

"So I've reached the view that it's right now, before the House of Commons goes away for the summer recess, to say that we're going to postpone the increase that was due in October," he said.

"I'll look again at the matter again in the budget but I think that this is the right thing to do to help motorists and to help businesses."

It follows a series of demonstrations by lorry drivers demanding cheaper diesel. Figures show petrol prices have risen nearly a quarter during the past year, and diesel 36%.

AA figures suggest the cost of a litre of unleaded petrol averaged 119.5p across the UK on Tuesday, with diesel averaging out at 133p.

Fuel duty increases have been postponed a number of times over recent years when oil prices have been high.

(bbc.co.uk)