Tory plan to cut fuel duty


The Conservatives have unveiled plans to cut fuel duty to help motorists cope with soaring prices.

The plans, announced by shadow chancellor George Osborne, would see tax levels linked to oil prices.

If the measures had been implemented at the last Budget, duty at the pumps would now be 5p lower, the party said.

Speaking on BBC1's Andrew Marr programme, Osborne said: "At the moment fuel duty goes up even when the price of oil goes up.

"The government revenue flows in because the price of oil goes up."

He went on: "Our proposal is for a fair fuel stabiliser. What this would mean is that when the price of oil goes up the fuel duty comes down to help families.

"But the quid pro quo is that when the price of oil falls the duty goes up.

"So government is sharing the pain of rising oil prices, but government is also sharing the gain when oil prices fall."

The Tories said the proposal would have cut 5p off a litre of fuel today had it been introduced in March.

But if oil prices had dropped below the level predicted fuel duty would have risen to compensate.

Osborne insisted the system would be cost-neutral for the government, as it would be financed with the higher tax take resulting from soaring oil prices - currently kept by the Treasury.

"We need a totally different approach to fuel duty where government helps families instead of harming them."

Treasury minister Kitty Ussher said: "George Osborne's proposal is a dishonest gimmick which would mean the Tories would have to hike up taxes somewhere else or would mean a massive hole in the public finances.

"Either George Osborne doesn't understand the way tax revenues work, or he's prepared to play fast and loose with the public finances for the sake of a good headline.

"As the independent IFS has shown, it is far from clear that there will be a net gain to the public finances from the higher oil price.

"So, if George Osborne were to do this, he would need to raise nearly another £3bn in taxes elsewhere to plug his tax gap - that's getting close to an increase of 1p in basic income tax.

"This is on top of the £10 billion of unfunded spending commitments George Osborne has already made. He is gambling with stability in the same way the Tories did in the 1990s when they caused 15 per cent interest rates."

If any political party wants to make a real impact on cutting fuel duty and raise the money from other sources then give more power to the essential authorities to stop the amount of fraud that goes on with jobseekers allowance, tax credits fraud, incapacity, DLA, mobility and false DFG claims. Make them ALL repay the whole amount and not just a piddly little fine and court costs.

That should raise at least £3 billion or more. But 5p per litre would not help the low income families, elderly or disabled. Cut the amount that the taxman takes.