Fleet News

Budget: Decision on fuel duty is a missed opportunity

The Freight Transport Association (FTA) has welcomed the Chancellor's decision to cancel the fuel duty rise planned for September, but has expressed disappointment that the pleas of industry and consumers to reduce fuel duty have been ignored.

In its pre-Budget submission to the Chancellor, FTA said that in order to ease cost pressure on domestic freight activity and stimulate economic growth through consumer demand, road fuel duty should be reduced by 3 pence per litre, with commensurate reductions in the duty rate for gas oil.

James Hookham, FTA's Managing Director of Policy and Communications said: "While we are relieved that the immediate danger has passed, in order to get the UK back on the road to economic recovery it is vital that we have a cut in fuel duty and a long-term strategy to prevent future rises and uncertainty.

"The Chancellor has once again squandered an opportunity to support UK industry, jobs and economic recovery, by failing to reduce fuel duty rates."

FTA has been at the heart of the FairFuelUK campaign to have all fuel duty increases scrapped and lobbying will continue for a reduction in the current level.

FTA acknowledged that duty rates for natural gas and biomethane relative to diesel rates have been fixed for a further year. 

However, the payback period for gas-powered trucks is at least 10 years and the fragility of the business case for these vehicles is such that uncertainty over even small increases in gas duty rates renders these investments uneconomic.

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  • Colin Peters, The Fuelcard Company - 21/03/2013 12:01

    I'm definitely in agreement with the FTA's comment. On the surface yesterday’s Budget announcement sounds positive for fleet drivers but in reality, what a disappointment. Mr Osborne appears to be repeating the same story he’s pedalled with each of his recent Budget announcements. As I’m sure everyone will agree, not having an extra 3ppl added on to our fuel is a good thing; I just feel it is again delaying the inevitable. How can a fleet business plan for the future when it is unsure whether it will have an increased tax burden? Something more permanent must be done ‘Petrol is now 13ppl cheaper than if the Government had not cancelled fuel duty’ Osborne claimed and yes this figure looks impressive, but I feel it distracts from the more important message of the elevated amount we are still expected to pay for our fuel. The quoted ‘13ppl’ is simply a culmination of all the previously planned (and then deferred or cancelled) fuel duty increases over the last two years. Not so impressive when you look at it like that! There is at least one hope for the country’s professional drivers in the shape of an extra £3billion investment in the UK’s infrastructure. A promise made in December’s Autumn Statement that Osborne seems to be delivering on. At the time, many branded the initial £5bn as a ‘drop in the ocean’ but combined with this additional £3bn it will represent the biggest spend on roads in a generation – no small investment and certainly not one that should be dismissed. Encouragingly though, Osborne seems to recognise the need for sustaining our transport network if we are to remain one of the most competitive economies in the world, so let’s hope this is a good sign of things to come.

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