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Osborne Considers Fuel-Duty Delay, Foiling Labour-Led Revolt

Nov. 12 (Bloomberg) -- U.K. Chancellor of the Exchequer George Osborne may delay an increase in duty on gasoline planned for January as the opposition Labour Party sought to provoke a rebellion by Conservative lawmakers over the issue.

Labour failed to win parliamentary backing for the delay in a vote in the House of Commons today after lawmakers including Robert Halfon, from the chancellor’s Tory party who last week considered rebelling, said he had received assurances from the Treasury that it will consider a delay. The motion tabled by Labour was defeated by 234-282.

“The chancellor may have already made his decision but, if not, I would urge the chancellor to reflect on the contributions made here,” said Conservative lawmaker Martin Vickers during the debate in the House of Commons minutes before the vote. “I shall be supporting the government on the lobby this evening.”

Labour lawmaker Ed Balls, the party’s spokesman on Treasury affairs, is using the non-binding motion to demand that Osborne put back from Jan. 1 to April the increase of 3 pence (4.8 U.S. cents) on a liter of gasoline. The increase had been due to take effect in August, before Osborne postponed it in the fourth of a series of policy reversals in June.

“I am going to vote with the government” against the Labour motion, Halfon, who last week considered voting with Labour, said in a telephone interview earlier today. He said he believes ministers “are in strong listening mode.”

Treasury minister David Gauke said the government will “take action to help” offset the squeeze suffered by households from rising prices. A spokesman from the Treasury, who declined to be named to comply with rules governing public servants, said the government has listened to the concerns of motorists and that it recognizes that the cost of fuel takes up an increasing part of household spending.

Both Osborne and Balls were absent from the debate after the signal from the Treasury defused the rebellion.

June’s postponement cost the Treasury 550 million pounds and was paid for by savings from government departments. Any further delay would be announced by Osborne in his autumn statement to Parliament on Dec. 5, one of two dates in the parliamentary calendar when he changes tax and spending policy.

To contact the reporters on this story: Gonzalo Vina in London at gvina@bloomberg.net; Kitty Donaldson in London at kdonaldson1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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