Fleet News

Government urged to scrap fuel duty rises

The Government is being urged to scrap scheduled fuel duty increases in 2012 following a vote by MPs in the House of Commons.

Conservative backbencher Robert Halfron tabled a motion urging action following an e-petition signed by more than 100,000 people, suggesting "Fuel duty is not just about economics, it's an issue of social justice and this is especially true in rural communities which are being destroyed by fuel prices."

Fuel duty increases scheduled for 2011 were postponed in the Budget in March, but the first of these delayed increases of 3p per litre is scheduled to be introduced in January 2012, followed by a further increase in August which could be even higher.

Fuel duty was cut by 1p per litre in the 2011 Budget, while the fuel duty escalator, which automatically increased duty by 1p higher than inflation, was scrapped. Chancellor of the Exchequer George Osborne also announced a stabiliser for fuel duty.

The vote by MPs is not binding on the Government and the fuel duty increase is still on course for January 2012, with the Treasury suggesting the annual Budget is the proper place for changes in fuel duty.

But campaigners have argued that with VAT receipts increasing through fuel price rises, cutting fuel duty should have a low impact on revenue for the Government, adding that rises also increase pressure on inflation.

Theo de Pencier, chief executive of the Freight Transport Association (FTA), said: "The enthusiastic political support for our motion reflects emotions felt by businesses and motorists around the country with the high cost of filling a fuel tank a truly national concern and one that is inextricably linked to our economy's health.

"Thanks to tremendous support for our campaign from industry, MPs and the public, the government has now heard first hand how high levels of fuel tax have not just hurt an industry beset by redundancies and insolvencies, but actually reduced the amount of revenue taken by the Treasury.

"Clearly, the instinct to raise taxes to fill a massive budget deficit heaps more cost pressure on business and stymies economic growth and must be suppressed. We have achieved a new level of engagement with MPs on this issue, but government needs to act now to kickstart our economy; scrapping the fuel duty rises planned for 2012 would be an excellent start."

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