A DEEPLY unpopular rise in fuel duty has been shelved by the Chancellor in a move welcomed by Worcester’s MP.

George Osborne, the Chancellor of the Exchequer, announced the proposed 3p-a-litre increase, due to come in August, would be put off until January.

It followed criticism from Labour shadow chancellor Ed Balls, backbench Conservative MPs including Worcester’s Robin Walker, and businesses, who argued it would suffocate any economic recovery in the UK.

Mr Walker, who has been calling for a rethink on fuel duty rises for 18 months, said he was “delighted”.

“A lot of us have been calling for this for a long time – and this is a move that will make a difference to a lot of businesses and people in Worcester,” he said.

He was among a group of Conservative MPs who met the chancellor earlier this month arguing a fuel duty rise would be false economy.

“The argument was always two-fold, in that drivers will buy more fuel if it is cheaper and plug the revenue gap,” said Mr Walker.

“But also, there is evidence fuel duty rises offer short-term gain to the Treasury, but cause long-term damage to corporation tax and other tax receipts.”

He said it was only “part of the solution for Worcestershire”, where prices are higher than elsewhere in the Midlands and South West.

West Worcestershire MP Harriett Baldwin said the chancellor’s move was “very good news”.

She echoed Mr Walker’s concerns over artificially high prices at the county’s pumps.

She said: “With falls in the cost of oil in international markets, I will continue to monitor local prices to make sure they aren’t making unfair profits.”

Joy Squires, Labour’s would-be MP for Worcester, said she backed Ed Balls’ calls to scrap the rise, and said it exposed Mr Osborne as a man “without a clue what he’s doing.”

The Treasury says it will afford the £500 million shortfall in revenue by off-setting it against savings made across other Government departments.