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Osborne plan to slash fuel duty
07.07.08Fuel duty would be slashed to help hard-pressed families deal with soaring prices, under radical Tory plans.
Shadow chancellor George Osborne promised to link tax levels to oil prices, so the Government "shared the pain" of hikes.
If the measures had been implemented at the last Budget duty would currently be 5p lower - easing the impact on motorists at the pumps.
Speaking on BBC1's Andrew Marr programme, Mr Osborne described the system as a "fair fuel stabiliser".
"At the moment fuel duty goes up even when the price of oil goes up," he said. "So instead of Government helping you with the rising cost of living, they are actually adding to it. The Government revenue flows in because the price of oil goes up."
Mr Osborne went on: "Our proposal is for a fair fuel stabiliser. What this would mean is that when the price of oil goes up the fuel duty comes down to help families.
"But the quid pro quo is that when the price of oil falls the duty goes up.
"So Government is sharing the pain of rising oil prices, but Government is also sharing the gain when oil prices fall."
The Tories said their proposals would have cut 5p off a litre of fuel today if they had been introduced in March - saving up to £3.50 on filling up a Ford Mondeo, or £2.60 for a Vauxhall Astra.
But if oil prices had dropped below the level predicted fuel duty would actually have risen to compensate.
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