Page last updated at 16:16 GMT, Tuesday, 29 March 2011 17:16 UK

Select Committee

Chancellor George Osborne has rejected claims that his "windfall tax" on oil companies could damage the industry.

He was questioned over the move during a hearing on the Budget by the Treasury Committee on 29 March 2011.

The Budget included a cut in fuel duty of 1p per litre - to be funded by the tax on oil companies.

However Labour MP John Mann challenged him over how much of the cost of fuel was taken by the taxman.

The Chancellor said it was 60p in every £1.30, whereas Mr Mann said it was 80p.

The Budget also included a downgraded growth forecast from 2.1% to 1.7%, and a borrowing forecast of £146bn this year, £2.5bn lower than anticipated.

The Chancellor announced that council tax would be frozen or reduced in every English council, but that winter fuel allowance payments would be reduced as a temporary increase would not be maintained.

The Institute for Fiscal Studies calculates that measures due to come into place in April 2011 will be equivalent to a loss of £200 per household on average.

However the Chancellor told MPs that the Budget had been endorsed by the OECD, the global economic watchdog.

Treasury committee membership

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