George Osborne has delivered a strong hint that a 1p fuel duty hike due next month will be scrapped amid fears over soaring oil prices.
The Chancellor told the Conservative Spring conference in Cardiff that he had “heard” protests from motorists being “squeezed” by rising costs at the pump.
Signalling he was ready to ease the pressure by dropping the increase in his Budget later this month, Mr Osborne told delegates: “We’ve got another of the Labour Party’s pre-prepared rises in petrol tax coming this April – one penny above inflation. When it costs £1.30 for a litre of petrol, £80 to fill up a family car, I know people feel squeezed.”
He added: “And I say this to people watching: I hear you.”
Despite Liberal Democrat doubts, the Treasury is still believed to be looking at the idea of a “fair fuel stabiliser” – where duty is reduced or raised to offset oil price movements.
The Chancellor also said the crucial March 23 package would include a series of measures to boost growth and tackle the “forces of stagnation” in Britain’s economy. Among the “greatest scandals” under Labour was that for every 10 private sector jobs created in the South, just one had been created in the North and Midlands, he said.
“The Budget is going to be unashamedly pro-growth, pro-enterprise and pro-aspiration,” Mr Osborne said. “It will look at the planning delays, the new regulations, the bureaucracy and the costs that hold business back and stop jobs being created. Not just in London, or the South East, but across Britain.”
At least 10 “Enterprise Zones” are to be introduced in England, in a scaled-down revival of the Thatcher government’s flagship urban renewal scheme. The zones will be targeted in areas of “high growth potential” and offer incentives such as simpler planning rules and “even lower” taxes for firms, according to Mr Osborne.
However, critics have warned that the £100 million of funding available over four years is a fraction of the billions that were given to Labour’s Regional Development Agencies.
Prime Minister David Cameron has arrived in Wales and plans to tell his party supporters he is sticking to his guns on his economic policies. The Welsh Conservatives’ leader Nick Bourne said his appearance at the two-day conference in Cardiff is a show of his serious commitment to the principality.