Retailers received a lift in today’s budget as Chancellor George Osborne cut fuel duty, easing pressure on cash-strapped consumers.

Osborne delayed the proposed 1p rise in fuel duty due to kick in next month and cut a further 1p from the duty in what was termed a “budget for growth”.

This morning (Wednesday), before the budget was revealed, Sainsbury’s chief executive Justin King warned: “Fuel and fuel price inflation is playing its part in driving the pressure on customers’ budgets.”

British Retail Consortium director general Stephen Robertson welcomed the move: “On its own it won’t make a huge difference to household budgets but should give a boost to struggling consumer confidence.”

In the Department for Business, Innovation & Skills there is a 131-page document released alongside the Budget called a Plan for Growth. In it, the government said it would help the retail sector.

It acknowledges that retail accounts for 5% of GDP and employs one in nine of the UK’s workforce. It promises to give more clarity on changes to the minimum wage, greater support for town centres, and making regulations more “outcome-focused”. It also pledged to remove barriers to increased cross-border online retail.

Barry Knight, Grant Thornton head of retail, said: “The scrapping of the fuel duty increase will have been top of retailers’ wish list and  is at last some good news for the retail community which  is still under tremendous pressure from low consumer confidence, cost inflation and rises in VAT and National Insurance.”

Osborne also confirmed he would “tackle the exploitation” of Low Value Consignment Relief, which enables the VAT-free sale of goods valued at less than £18 from the Channel Islands, which count as being outside the EU.

He wants to “limit the scope of the relief so that it can no longer be exploited for a purpose it was not intended for”.

The Government has still to decide exactly how to address the issue but will begin to tighten the loophole by reducing the price threshold from £18 to £15 in November. It could potentially help store groups that have been undercut by online operations such as and Amazon.

Osborne also revealed that personal allowance - the amount of income people can earn before having to pay any tax – will increase by around £600 from April 2012, meaning workers will be up to £326 a year better off.

Knight added: “Most retailers have experienced a dire first couple of months of the year so any measures taken to lure the consumer out will be welcome. The lowering of the income threshold for tax which will have an impact on close to 25 million people’s purses, and putting a lid on further rises in fuel duty could potentially help inject more spending on retail goods.”

Corporation tax will be cut by 2% in April, more than the 1% previously planned.

Osborne also said the business rate holiday for small business will be extended another year to October 2012. He also revealed a relaxation in planning laws that he said would encourage development programmes.

Robertson said: “The Chancellor is right to stand firm on austerity measures to bring the deficit under control and to refocus on the need to boost economic growth, given falling forecasts for GDP. Consistency of direction is crucial for jobs and investment – this is no time for zig-zag Government.”

Osborne added: “We have put fuel into the tanks of the British economy.”