Osborne springs fuel price surprise

Chancellor George Osborne
Chancellor George Osborne
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FUEL PRICES were reduced in this afternoon’s national budget.

Chancellor George Osborne announced a cut of 1p per litre of fuel in the UK’s budget, meaning drivers would save 60p on a £60 tank of petrol or diesel.

The cuts was a reverse of previous proposals which would have seen a 6p increase, meaning motorists could be £4.20 per tank richer.

The Chancellor said: ‘The budget has fuelled Britain, now we must see the country grow .’

Other measures include a pay increase of £250 per year for any NHS, education, armed services or civil service workers earning £21,000 or less.

And the income tax threshold will be increased to £8,105 in April 2012, meaning earners will be £126 better off ijn cash terms, and lift 1.1m low-paid earners from paying income tax altogether.

Tobacco will rise in price by about 7.5 per cent, or 15p per pack of cigarettes, while a similar rise in alcohol prices will see a pint of strong beer rise by around 4p, a bottle of wine by 13p and spirits 51p per bottle.

But the government has also announced it will set up a new ‘first-time buyer fund’, worth £250m.

Any first-time buyer with a household income of £60,000 or less per year will qualify for a loan, interest free for five years, worth 20 per cent of the value of the house they want to buy.

The loan would be repaid only when the house is sold.

The government has also pledged an extra £100m for repairing potholes across the country, bringing the national fund to £200m.

Mr Osborne said new laws on tax evasion will help raise £1bn per year. The plans include proposals to stop internet firms such as Play.com selling CDs and entertainment products from the Channel Isles, to avoid paying VAT.

He promised an extra 100,000 work experience places and 40,000 apprenticeships in a bid to cut youth unemployment, but admitted inflation - at 5 per cent - and growth - at 1.7 per cent, were below targets he had set in June last year.