A cut in petrol duty from tonight, the cancellation of all planned increases above inflation and a new "fair fuel stabiliser" - all paid for by the oil companies.
The result? Fuel duty goes down by 1p a litre now instead of going up, as planned, by between 4-5p. The next time duty will rise in line with inflation is in January 2012.
We were told that that George Osborne would be inspired by Nigel Lawson's tax reforming and Michael Heseltine's activism. His headline grabber looks to have been inspired though by his great political enemy - Gordon Brown.
In 1997 Chancellor Brown raised £5bn in a windfall tax on privatised utilities. The way Chancellor Osborne is paying for a cut in fuel duty is by taxing the oil companies by £2bn a year. He is proposing not a one off windfall tax but a permanent mechanism which taxes the profits of the oil companies when the world oil price goes above a certain level. They would get a tax refund, however, if the price goes below it.
Cutting the cost of fuel was the chancellor's way to ease the squeeze on people.
His corporation tax cut, promise of tax simplification, planning reform and deregulation and the creation of enterprise zones were his recipe for private sector growth.
Update 14:46: Ed Miliband had nothing to say about the chancellor's proposal to tax oil companies more to keep the fuel duty down - surprising given that high fuel prices have been a theme he has pursued.
He was clearly wrong-footed by George Osborne's last-gasp fuel tax surprise but did squeeze in the briefest of mentions by contrasting today's cut with the rise in VAT announced in January:
"The chancellor cut duty by 1p but whacked up VAT on fuel by 3p - families won't be fooled, it's Del Boy economics".
However, the Labour leader's key focus was to ridicule a so-called "Budget for Growth" that downgraded the immediate growth forecast. That drop in growth and the other bigger pressures on incomes - not a penny or two less of an increase in fuel prices - will, he believes, shape the economics and the politics of the next year.
Source: http://www.bbc.co.uk/blogs/nickrobinson/2011/03/petrol_pump_pol.html
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