George Osborne to freeze air passenger tax

George Osborne vowed that there will be no more tax rises and no more spending cuts in this week's Budget (REX FEATURES)

Chancellor George Osborne will use his Budget on Wednesday to trim the cost of holidays abroad by freezing air passenger duty.

The duty goes up automatically in line with inflation each November, but the Chancellor is expected to announce that there will be no rise this year.

At a cost to the Treasury of around £150 million a year, the measure could save a family of four around £4 on a trip to a European destination or as much as £36 on a long-haul flight to Australia.

At present, the duty adds £12 to the cost of an economy flight within Europe, £60 to the USA and £85 to Australia. Higher charges are applied to business and first-class tickets.

Mr Osborne vowed that there will be no more tax rises and no more spending cuts in this week's Budget, which will set out a package of measures to boost growth and jobs.

And he left no doubt that he will resist Labour calls to scale back the pace of deficit reduction, saying: "That's not going to happen."

Mr Osborne confirmed he will raise income tax thresholds in real terms in the March 23 Budget, amid reports that he may take all those earning under £8,000 out of the tax altogether.

And he gave a strong hint that he will postpone the 1p rise in fuel duty scheduled for April 1 in order to relieve pressure on motorists struggling with prices at the pump of £1.30 or more.

He is also expected to extend the Support for Mortgage Interest scheme introduced under Labour for a further year, helping an estimated 100,000 households avoid repossession. The scheme, which had been due to end at the start of 2012, offers support for home-owners struggling with mortgage repayment due to unemployment.

Asked on BBC1's Andrew Marr Show whether he will rein in the cuts programme, as Labour has demanded, the Chancellor replied: "That would be a huge mistake for the country.

"We would lose economic stability, we would be back in the mess of wondering what is going to happen tomorrow to Britain's credit rating. That's not going to happen."

Mr Osborne said that the necessary cuts and tax rises were all included in last year's emergency budget, leaving him free this year to concentrate on growth and jobs.

"Having undertaken the rescue mission last year, I don't have to come back and ask for more this year," he said.

"So I can say in the Budget this week I am not going to be asking for more tax increases or more spending cuts.

"We have asked what is required of the British people in last year's Budget and that enables us in this year's Budget to move on to putting in place the policies that will help Britain compete, help Britain create jobs and growth in the future."

Mr Osborne confirmed that this will involve a large boost in apprenticeships and work experience schemes for the young unemployed, and said that he would expand university technical colleges to provide vocational skills.

But Labour's shadow chief secretary to the Treasury Angela Eagle said: "George Osborne's claim to have mounted a 'rescue mission' of the British economy shows just how out of touch he is with what's happening in the real world.

"His reckless plan to cut too deep and too fast has taken a growing economy with falling unemployment and delivered an economy which shrank at the end of last year, a 17 year high in unemployment and rising inflation.

"George Osborne needs to snap out of his denial and rethink the speed and scale of cuts and tax rises which are hitting families hard in the pocket and derailing our economic recovery.

"There need to be tough decisions, but you can't get deficit down if the economy doesn't grow strongly this year and there are fewer people in work making a contribution. George Osborne needs to think again and get a plan B that puts jobs and growth first, before it's too late."