Government freezes fuel tax

The Government has announced that a 2p rise in fuel duty planned for October is to be postponed.

Prime Minister Gordon Brown said the freeze is designed to help those facing high fuel and food bills.

"In recognition of the problems that people face with petrol, we are freezing the duty of petrol for the full year," said Brown. "And we will bring forward further measures to help families in due course."

However, the RAC's Head of Campaigns, Sheila Rainger, said that Chancellor Alistair Darling had "pulled a populist rabbit out of the hat by scrapping the 2p rise".

"This is a drop in the ocean compared to the extra £2 billion that the Treasury intends to take from the motorist over the next two years," she added.

The director-general of the British Chambers of Commerce David Frost said that the decision was "a step in the right direction", but that the tax should now be permanently scrapped.

"Businesses are being pushed to the absolute edge by the painfully high price of petrol at the pump, with many firms left with no choice but to pass on extra costs to the hard up consumer," he said.