Isabel Hardman Isabel Hardman

Osborne’s handbrake turn on fuel duty

George Osborne’s U-turn today on fuel duty seems both canny and confusing. It comes just 48 hours after a denial from Transport Secretary Justine Greening that the Government would scrap the 3p rise in August, but appears to be warding off the threat of a backbench rebellion in the Commons next week on a motion submitted by Labour to the Finance Bill. 

Ms Greening told the Sunday Telegraph: 

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So more power to the backbenchers, led by Robert Halfon, whose campaign against fuel duty increases now looks to have succeeded in part, although he might want to continue to push retailers to push costs down anyway. But it is still surprising given the rebellion from Conservative MPs was not expected to reach beyond double figures. Is the Treasury really so scared of a handful of MPs that it felt another U-turn was needed? Ed Balls was in bullish form on the Today programme this morning, pushing his amendment. Surely ministers are not running in fear of the Shadow Chancellor? There is the possibility that the Chancellor was following the advice of the Institute of Directors, which put freezing fuel duty at the top of its wish-list for improving the UK’s competitiveness. Granting that wish might have seemed rather wise in the light of today’s dismal public sector borrowing figures.

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