Tories pledge to cut fuel tax

The Conservatives have unveiled radical plans to slash fuel tax to help families cope with soaring prices.

Shadow chancellor George Osborne promised to link duty levels to oil costs, so the Government "shared the pain" of hikes and "shared the gain" of falls.

The move would have cut 5p off the price of a litre of petrol or diesel if it had been introduced at the last Budget.

Motoring groups immediately welcomed the proposals, warning that drastic steps were needed to ease the pressure at the pumps.

But the Government branded the Tories "dishonest", saying the policy would leave a "massive hole" in the public finances.

"Either George Osborne doesn't understand the way tax revenues work, or he's prepared to play fast and loose with the public finances for the sake of a good headline," said Treasury minister Kitty Ussher.

"It is far from clear that there will be a net gain to the public finances from the higher oil price."

The Tories moved to outflank the Government amid burgeoning anger over rising fuel and food prices.

There has also been fury over plans to reform the road tax system to hit "gas-guzzlers" - which many believe will punish poor families with older cars.

Prime Minister Gordon Brown and Chancellor Alistair Darling have already hinted strongly that the 2p duty hike due for the autumn will be suspended.

However, the Government is under pressure to do more, amid fears that the economy could slip into recession as consumers and businesses struggle to cope with bigger bills.

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