Newspaper article The Evening Standard (London, England)

OSBORNE IN PETROL DUTY FREEZE AND TAX CUT HINT; CHANCELLOR TAKES A SUNNY VIEW OF RECOVERY BUT WARNS SPENDING SQUEEZE WILL LAST TILL 2020; Osborne: Don't Trust Fag Packet Promises of Balls and Miliband

Newspaper article The Evening Standard (London, England)

OSBORNE IN PETROL DUTY FREEZE AND TAX CUT HINT; CHANCELLOR TAKES A SUNNY VIEW OF RECOVERY BUT WARNS SPENDING SQUEEZE WILL LAST TILL 2020; Osborne: Don't Trust Fag Packet Promises of Balls and Miliband

Article excerpt

Byline: Joe Murphy Political Editor

GEORGE OSBORNE today announced plans to freeze petrol duty until after the election -- but warned that the squeeze on spending must continue until 2020.

Making his keynote speech to the Conservative conference, the Chancellor also dropped a big hint that he is planning tax cuts, promising that people will "share the rewards" of recovery.

Declaring himself a firm optimist, he echoed Ronald Reagan by saying: "For the sun has started to rise above the hill, and the future looks brighter than it did, just a few dark years ago."

Mr Osborne's mixture of election sunshine and stern economic lecturing earned him a standing ovation from the Manchester hall.

The Chancellor said that he aims to cancel a 2p per litre rise in fuel due next September, and he ruled out any other increases for the rest of the parliament.

His promise pleased motorists and was clearly brought forward to counter Ed Miliband's pledge to freeze gas and power tariffs for 20 months. "Provided we can find savings to pay for it, I want to freeze fuel duty for the rest of this parliament," he said.

It will cost [pounds sterling]750 million to cancel the rise next September, which is the last of the annual increases left by the previous Labour government.

Mr Osborne will then have frozen duty for four years in total, saving motorists almost 15p per litre compared with what they would have paid, at a total cost to the Treasury of [pounds sterling]22 billion. Hinting that he expects to be able to go further and return to the election-winning tax cutting formula of Baroness Thatcher, he told the country: "We rescued the economy together, we are going to recover together. And together we are going to share the rewards."

However, the Chancellor then gave a stern message that the country must start paying down the [pounds sterling]1.5 trillion national debt after the structural deficit is eradicated in around 2017-18.

In future, even in good times, he would insist that the annual budget runs a surplus as "insurance" against another economic crisis, gradually bringing down the [pounds sterling]1.5 trillion national debt. Overall spending would be held steady in the next Parliament, except for capital investment which would rise in line with the economy to encourage further growth. That meant that dayto-day spending would have to fall to pay for the capital side. It was, he claimed "a serious plan for a grown-up country".

He argued that his plans could be better trusted than the "fag packet" promises of Mr Miliband and Ed Balls, which he claimed would drive up borrowing and interest rates.

"People know the difference between a quick fix con and a credible economic argument," he said.

Setting the scene for the election, he argued that the economic crisis was far from over, and voters would be foolish to take a risk on Labour. …

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