Osborne sets out tough economic policy with focus on growth
Motorists were offered a £750 million pre-election sweetener yesterday, as Chancellor George Osborne declared his ambition to impose a freeze on fuel duty until polling day in May 2015.
The freeze – which is conditional on finding savings elsewhere – was announced as Mr Osborne set out a tough new economic policy which will require future Conservative governments to run an absolute surplus during periods of growth.
Extending the freeze on fuel duty, which has already stretched more than two and a half years, would mean cancelling the 2p-a-litre rise pencilled in by former Labour chancellor Alistair Darling for September 2014 .
The plan will be welcomed in the rural Westcountry, where motorists generally pay more for fuel and make more journeys than in major towns and cities. But Labour condemned the "panicky announcement" as mere "aspiration".
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Oliver Colvile, Conservative MP for Plymouth Sutton and Devonport, said: "This is great news, especially for the rural areas of the South West, where people rely so heavily on their vehicles to get about.
"It will also make it much easier for the bus operators, who often have to increase fares to survive making it harder for hardworking people to use public transport. Let's hope this also ends the discrepancy in prices people in the Westcountry see at their petrol stations."
Coupled with a commitment to increase infrastructure spending at least in line with GDP growth, the policy means that there will be no let-up in public spending discipline if the Tories win the next election, even after they have achieved their target of eliminating the deficit, said aides.
British governments have run a surplus, by spending less than they take in through taxes and other revenues, in only seven out of the past 50 years.
Attacking the former Labour government for running deficits even during the boom times ahead of the 2008 crash, he warned: "This crisis took us to the brink. If we don't reduce our debts, the next could push us over."
Mr Osborne used his keynote speech to deliver a broadside on Ed Miliband's economic plans, comparing the Labour leader with Karl Marx, accusing him of a "retreat to the left" and dismissing his proposed freeze on gas and electricity prices as a "quick-fix con".
Buoyed by a series of positive economic indicators, the Chancellor said he was an "optimist" about Britain's future and declared: "The sun has started to rise above the hill and the future looks brighter than it did just a few dark years ago".
But he warned: "The battle to turn Britain around is not even close to being over and we are going to finish what we have started."
He confirmed plans to require the long-term unemployed to work for their benefits and to accelerate a Government-backed mortgage scheme to help property-buyers raise a deposit for their home.
"Provided we can find the savings to pay for it, I want to freeze fuel duty for the rest of this Parliament," said Mr Osborne, to loud applause.
Mr Osborne's help for drivers was welcomed by motoring organisations, though the RAC Foundation pointed out that the Chancellor will still be taking 60% of the price of a litre of fuel in taxation.
But Labour Treasury spokeswoman Rachel Reeves said Mr Osborne had "nothing concrete to say on helping families with the rising cost of living". Ms Reeves said: "His panicky announcement on fuel duty turns out to be just an aspiration if he can find savings elsewhere."