Petrol retailers 'should drop prices', says Plymouth MP
PETROL retailers should cut their prices after Chancellor George Osborne scrapped August's planned 3p rise in fuel duty according to a Plymouth MP.
Hailing the freeze by the Treasury as "sensible" Oliver Colvile said sellers should now respond by making reductions at the pumps.
The £500 million boost to motorists can be paid as a result of departmental savings across Whitehall, the Treasury said.
Announcing the measure to cheers from Tory benches in the Commons, Mr Osborne said fuel duty would now be 10p a litre lower than under the plans inherited from Labour.
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"We are on the side of working families and businesses and this will fuel our recovery at this very difficult economic time for the world", he said.
Labour had urged Mr Osborne to scrap the rise, with shadow chancellor Ed Balls calling for the Government to use the £500 million underspend from the Olympics to fund the move.
But Treasury sources insisted Mr Osborne's announcement had been under consideration for some time.
The Chancellor told the Commons: "The one-off cost of this change will be fully paid for by the larger-than-forecast savings in departmental budgets."
He said it was a sign the Government was "doing everything we can in very, very difficult economic circumstances for the world".
Tory MP for Plymouth Sutton and Devonport Oliver Colvile said: "This is a sensible thing to do.
"What the Government want to see happen is to see fuel sellers taking a much more pragmatic view and cut their margins too."
The August rise has been deferred until January next year, at a one-off cost to the Exchequer of £550 million, Treasury sources said.
The move was first discussed at a meeting of the 'quad' – Prime Minister David Cameron, Deputy Prime Minister Nick Clegg, Mr Osborne and Treasury Chief Secretary Danny Alexander – on May 28. Sources insisted the announcement was timed for today because it was the last Treasury questions session in the Commons before MPs begin their summer recess next month.
Labour MP for Plymouth Moor View Alison Seabeck said: "We have been pressing for some time for the Chancellor to take some action which would result in a reduction in the price of fuel.
"The Chancellor has had a rethink which we welcome."
But in the light of other U-turns, Ms Seabeck added: "We have to ask why he's getting himself in this mess.
"It just adds to the chaos and a sense we have got a government unclear of the direction they are taking the country."