Darling confirms suspension of 2p increase in fuel duty » Bill payments » 24dash.com

Alistair Darling moved to head off growing anger from motorists today by confirming that this autumn's 2p rise in fuel duty will be scrapped.

The Chancellor said suspending the rise, which had been due to take effect in October, would "help motorists and businesses get through what is a difficult time for everyone".

Both Mr Darling and Gordon Brown had previously given heavy hints that the increase would be shelved amid soaring oil prices.

However, the Treasury had insisted that no final decision would be taken until closer to the time.

Motoring organisations welcomed the move but called for more to be done to ease the pressure on motorists.

The RAC said: "This is welcome news but it does not go far enough. We would like to see the Chancellor not just postpone future rises but actually cut fuel duty."

The decision was disclosed with little fanfare in a response to a Parliamentary question tabled by a Labour backbencher.

Mr Darling said: "Postponing the planned increase in fuel duty is consistent with the Government's commitment to support the Bank of England in maintaining low inflation."

He added: "The global credit crunch and sharp rises in world oil prices have pushed up prices at the pumps. Today's decision will help motorists and businesses get through what is a difficult time for everyone."

AA president Edmund King said: "We are delighted that the Chancellor has seen common sense. The prospect of extra, Government-inflicted pain was not something that road users were looking forward to.

"Many motorists have endured months of misery and this is a welcome piece of good news for them."

Peter Carroll, a Kent-based haulier and part of the Transaction group which helped organise a number of fuel protests by lorry drivers in London this year, also welcomed the 2p postponement.

He said: "This is good news but it does not go anywhere near giving the UK road haulage industry a level playing field to compete with foreign truckers.

"What's happened today is a little like someone with a gaping wound going to hospital and merely having the blood wiped away. What we need is for the haulage industry to qualify for an essential user rebate on fuel which would cut the price of diesel by 25p a litre."

Mr Carroll went on: "We also want to know what the Chancellor intends to do about the planned fuel duty rise for next year which is linked to inflation which is currently running at a very high level."

Soaring oil prices mean it has taken around five weeks for petrol and diesel prices at the forecourt to rise 2p per litre to current levels, the AA said.

The cost of a litre of unleaded petrol averaged at 119.5p across the UK yesterday, the motoring organisation added, with diesel averaging out at 133p.

Figures show petrol prices have risen nearly a quarter during the past year, and diesel 36%.

The Chancellor had already pushed back the 2p fuel duty rise to October from April.

However, with oil prices nearly doubling over the past year, there has been mounting pressure for a further delay.

The Tories upped the ante last week by proposing a "fair fuel duty stabiliser" which would lower the levy when the cost of oil went up, and increase it when it fell.

The Government has also come under heavy fire over reforms to road tax, which it has admitted will leave 9.4 million drivers worse off - including many on lower incomes who drive older, more polluting cars.

News of the freeze emerged just minutes after figures showing the biggest jump for 15 years in the number of people claiming unemployment benefit.

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

"(The Chancellor) decided to do it now because he wanted to end any uncertainty," he added.

But Lib Dem Treasury spokesman Vince Cable insisted the move was "utter madness".

"The Chancellor is now so scared of appearing indecisive that he has been panicked into making a snap decision on fuel duty," he said.

"It is utter madness to make an early decision when no-one knows either what the price of oil will be or what state the public finances will be in come the autumn.

"Delaying the fuel duty increase until next spring will cost the Treasury an additional £550 million. With the Government already £45 billion in the red this year and most likely losing revenue from stamp duty, corporation tax and income tax, how will this be paid for?"

The decision means the road fuel duty rate will remain at 50.35p per litre.

Scheduled increases for heating oils - which have seen some of the biggest rises over the past year - road fuel gases and biofuels will also be postponed.

The SNP claimed it had forced the Government to act by making the issue central to the campaign for next week's crucial Glasgow East by-election.

Many Labour insiders believe losing the seat could put Mr Brown's leadership under unbearable strain.

The party has a majority of more than 13,500, but is facing a strong challenge from the nationalists amid fallout from the credit crunch and disastrous results in polls in Crewe and Henley.

Scotland's First Minister Alex Salmond said the decision was down to SNP pressure during the Glasgow East by-election campaign.

"If you are in the middle of a by-election campaign and if you get a freeze on duty in the by-election campaign, just think what you will get when John Mason is elected as MP for Glasgow East," Mr Salmond said while campaigning in the constituency today.

He said the announcement showed that political pressure paid off and the Glasgow East campaign was the "epicentre" of demands for the Government to act on rising living costs.

"I think the Chancellor is a worried man politically and he should be worried politically," said Mr Salmond.

"We are worried about the economy and something dramatic has to be done to get hold of rising costs.

"We welcome the concession that's being made and we are confident that, when John is elected, there will be further to come."

Mr Salmond went on: "I think the Glasgow East by-election is concentrating their minds wonderfully in London.

"It will concentrate them even more after the result next week.

"If Gordon Brown won't come to Glasgow East, then the message will go to Gordon Brown."