The planned fuel duty hike for January could be postponed again as campaign groups have urged the Government to tackle the problem of increased fuel costs.
Earlier this year Chancellor George Osborne announced the 3p fuel duty hike would be postponed until January 2013. This was welcomed by motorists due to how expensive fuel had become. January is now approaching which would see motorists paying more for their fuel if the hike was applied.
Campaign Group FairFuelUK have presented a summary of results from their research carried out by the National Institute of Economic and Social Research. It was found that if the 3p hike was to go ahead it would destroy 35,000 jobs, cut growth by 0.1% and a rise in inflation could result in the Bank of England raising interest rates earlier. The research also looked at the impact of cutting the fuel hike. It found that it would increase 70,000 jobs, growth would rise by 0.2% and a reduction in fiscal position would be £1800m or less.
The Government have now hinted that the fuel duty hike could be axed after Labour also called upon the Government to axe the increase.
It is not yet known officially if the Chancellor will delay the increase until the Autumn Statement which is due to be published next month.
Treasury Economic Secretary Sajid Javid said: “The Government is doing all it can to help hard-working families with the cost of living and putting money back into their pockets.
“Action on fuel duty is part of this. Fuel duty is currently 20% lower in real terms compared to its peak in March 2000 and 7% lower compared to May 2010.
“If we had continued with the policies of the previous government, quite simply prices would be higher. Fuel would be 10p more expensive per litre.
“I know some will call for a further freeze in fuel duty today. I can assure them this Government understands the financial pressures hard-working families are facing.”
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By Amanda Bainbridge