Osborne urged to cut fuel VAT

George Osborne has been urged to reverse the VAT rise on petrol as a way of providing some "immediate relief" for cash-strapped motorists and hauliers.

The Chancellor had committed an "own goal" in allowing the recent hike to 20 per cent, which was part of an "extreme and reckless strategy" on the economy, Labour claimed.

As average petrol prices climb above 1.31 a litre, shadow chancellor Ed Balls said Labour would force a Commons vote aimed at reversing the rise. But he said it would not be "responsible" to make commitments "on every tax rate and every benefit rate", he told the Murnaghan programme on Sky News.

Labour leader Ed Miliband and Mr Balls were today due to set out measures to use the bank bonus tax to boost jobs and construction.

Mr Balls said: "I think he should act immediately on VAT. This was an own goal."