Fuel tax rise put on hold

Chancellor Alistair Darling provided some relief for motorists this afternoon by postponing the 2p a litre increase in fuel tax.

But there was no help for drinkers and smokers – with dramatic increases in the price of cigarettes, beer, wine and spirits.

The petrol duty rise had been due to come into force at the beginning of next month, taking prices at the pumps to more than £5 a gallon.

But it will now not happen until the autumn of this year.

The Chancellor said: "Fuel duty is due to rise again in April but because I want to support the economy now and help business and families I will postpone that increase until October."

Without specifying the figures, he announced new first-year rates of road tax with much higher fees for people buying high polluting vehicles and a zero rate for motorists who buy cars with carbon emissions lower than EU targets.

Duty on tobacco was rising from 6pm today, adding 11p to the price of a packet of 20 cigarettes and 4p to five cigars. Beer will rise 4p a pint from Monday, cider 3p a litre, wine 14p a bottle and spirits 55p a bottle.

The winter fuel allowance for pensioners will rise from £200 to £250 for the over 60s and from £300 to £400 for the over 80s.

A planned increase in child benefit to £20 for the first child will be brought forward to April 2009, and other tax changes will help poorer families gain up to £17 a week."

Corporation tax will fall from 38 per cent to 28 per cent next month.

Mr Darling also made a series of green measures, pledging to create laws by 2009 restricting the use of plastic bags and committing the Government to investigating a national road pricing scheme.