By Tim Shipman
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Pressure from David Cameron to ditch the 3p fuel price rise planned for August is facing resistance from the Treasury.
Senior ministers have voiced concerns that failure to axe the tax rise will damage support for the Tories from poorer voters.
Fifty MPs, including seven Tories, have now signed a Commons motion calling for the price rise to be scrapped. They were joined last night by leading businessmen, with the boss of Asda also demanding the tax hike is cancelled.
George Osborne has told colleagues not to expect him to find enough cash to plug the gap if the fuel rise is scrapped
Sources in Whitehall say intense efforts are being made to find £1.5billion to plug the income gap if the fuel duty rise is pulled. Ideas under consideration include cutting the 3p rise to 1p or 2p, or deferring part or all of the rise until next spring.
But Chancellor George Osborne has told colleagues not to expect him to find enough cash.
Yesterday Danny Alexander, the Chief Secretary to the Treasury, played down hopes of progress. He said: ‘Right now, taxation on fuel is 10p a litre less than it would have been if Labour’s plans had been in place.
‘But given the huge issues we have with public finances, we also need to make sure that we’ve got the money coming through the tax system, and the increase in fuel duty is part of that.’
That will not satisfy frustrated ministers who believe overturning the rise in duty is vital since they have been told to emphasise what the Coalition is delivering for ordinary families.
The Prime Minister has asked for the fuel rise to be cancelled as next week he is due to deliver a speech emphasising the importance of fairness for rich and poor.
Chief Secretary to the Treasury Danny Alexander has played down hopes of progress over the issue
A ministerial aide told the Mail the Treasury must find a way: ‘We have to get this done. Cameron wants to get it done. Half the Cabinet wants to get it done.
‘We’re getting slaughtered because people think we’re out of touch with low-income households. The last thing we need, particularly over the summer, is to get the blame for hiking petrol prices. We’re aiming the gun at our own foot on this.’
Andy Clarke, chief executive of Asda, called for the tax hike to be ditched so that households could instead spend the money on helping the wider economy recover.
A ministerial aide has said the Government will get 'slaughtered' unless they find a way to ditch the planned hike
He said: ‘For the shopper, for the mum who’s managing on a budget and being very careful, 3p is still going to have an impact on the weekly expense. The Government needs to think about how to protect the British family and give them more confidence to spend.’
Downing Street also downplayed the prospects of successfully dropping the tax rise. A No 10 source said: ‘We are seeking to move heaven and earth to make this happen, but that is different from actually moving heaven and earth. It’s difficult.’
Treasury mandarins have also pointed out that the price of oil is falling and is close to its lowest level for an entire year. A barrel of Brent crude was trading yesterday at $96, down from $135 in 2009 and a recent spike of $115.
Senior Government sources say the Chancellor will seek to offset public fury by reminding voters that his decision to raise the amount people earn before they pay income tax in his Budget lifted two million working f amilies out of tax altogether.
A source said: ‘We get this completely. But we have already cancelled the fuel duty escalator and cancelled rises in duty.’
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Only a couple of months ago this idiot and the other idiot cam, we're in the US begging Obama to help cut the price of fuel, yet most of the problem with the price is caused by these idiots putting the tax on it up - andy, derby, 20/06/2012 07:31 Why? So they could put more tax on it!
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Why don't we have a 50p income tax rate. Oh sorry forgot Gideon abolished that disgusting idea for his mates
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'Senior Government sources say the Chancellor will seek to offset public fury by reminding voters that his decision to raise the amount people earn before they pay income tax in his Budget lifted two million working families out of tax altogether.' SO WHAT ! most taxes are paid indirectly now anyway, just on fuel alone, a man driving 15,000 miles will pay close to 2000 pounds.a year in fuel tax vat ! How about answering more relevant questions like, how many jobs will the fuel hike in August cost how many jobs did reducing the top-rate of tax from 50p to 45 for the minority cost ?
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I'm sick of saying this. George if you are short of revenue look at our benefits bill. It's around £121 billion. Now if the people who are going to get postage stamps this Christmas at last years prices were taxed on their share of that then problem solved. Oh and have a bonfire of the quangos too. Move heaven and earth, don't make me laugh.
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I'd put a bet on the economy bouncing back slightly us coming out of a double dip recession with the next set of figures , now that the high fuel price has relented a bit , but do the conservatives understand this ? ...... NO , of course not , they still think the recession was caused by dole scroungers who don't want to do work in the 3 million jobs that only exist in Ian Duncan Smiths mind.
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As an Economist i can tell you all that Imposing another 10 p on fuel will ensure higher inflation and a longer recession. Is Osbourne stupid? He has no grasp of economics or perhaps he is too rich and does not care.
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Either way it will not make one scrap of difference to MP's as all their travel costs are covered by you and me.
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THIS TAX RISE WILL MEAN MORE TAX CUTS TO PEOPLE WHO DONT NEED IT, ONCE AGAIN WORKING HARD PRESSED FAMILIES, ARE SUPPORTING THE VERY RICH
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Only a couple of months ago this idiot and the other idiot cam, we're in the US begging Obama to help cut the price of fuel, yet most of the problem with the price is caused by these idiots putting the tax on it up
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The pigs at the trough still have to be fed !.
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