Hopes Rise Fuel Duty Hike Will Be Scrapped

Hopes are rising that Chancellor George Osborne will scrap a planned hike in fuel duty in next week's Budget to help ease the cost of living.

The move would mean that the coalition has axed or frozen every scheduled rise since 2010 and the prospect has already been welcomed by motoring groups.

The duty was due to rise in the autumn but Mr Osborne will cancel it to appease Tory MPs, according to the Spectator magazine.

He is also tipped to unveil the coalition's long-awaited plans to ease the cost of childcare, with proposals that will apparently go further than expected.

Both moves appear designed to offset criticism from some backbenchers who are concerned the Government is not doing enough to help households struggling to make ends meet.

After a drop in pump prices in recent months, average petrol prices have bounced back to the 140p mark again - crippling many families who rely on their cars for work.

George Osborne's Budget is next week

There has been some respite for drivers this week due to supermarket cuts but many households have to spend a large proportion of their income on petrol.

AA president Edmund King said scrapping the rise would be "very good news for motorists, for businesses and for the economy generally".

The AA had already written to Mr Osborne warning about the high cost of fuel and arguing that scrapping the rise would increase business confidence.

"High fuel costs hit not only drivers but the entire economy. Any scrapping of planned fuel duty increases gives a degree of certainty to the country," Mr King said.

Since the beginning of this year, petrol has risen around 8p a litre to an average of 140p and diesel has gone up 6.5p to an average of 146.38p.

David Cameron was asked about fuel duty during a visit to a Mercedes-Benz plant earlier this week and admitted it was a struggle to run even an "inexpensive family car".

"We've got to do everything we can to help people to get on, help people get to work, help people live their lives," he said.

The Budget on March 20 is probably Mr Osborne's most crucial so far as the Tories suffer in the polls and the economy continues to flounder.

He was widely criticised for his financial statement last year, which was dubbed the "omnishambles" budget because of a series of U-turns.

The Chancellor is likely to be forced to admit that his own economic targets will be broken because of the lack of growth but is not expected to signal a change of course.

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