Budget: Fuel duty frozen 20 | 03 | 2013
FUEL DUTY WAS frozen again today in the Budget, and it's likely Chancellor George Osborne may well freeze fuel duty rises throughout this parliament. Today Osborne cancelled the rise which had been planned for September.
Significantly, Treasury documents published alongside the Budget showed that rather than the widely anticipated 3p/litre increase, September's rise was actually due to be only 1.89p.
The Chancellor's announcement means duty on a litre of unleaded petrol or diesel will remain at 57.95p until at least September 2014.
Motoring groups and backbench Tory MPs had applied sustained pressure to the Chancellor in the lead-up to today's Budget: they argued that driving was already prohibitively expensive because of the high oil prices of the last few years.
The "fuel duty escalator" rises, put in place by his predecessor in the Labour Government, had already been cancelled by Osborne. Today's announcement was naturally welcomed my motoring groups.
"This news provides breathing space for families being smothered by the soaring costs of motoring, especially the 800,000 households spending more than a quarter of their income on operating a vehicle," Prof Stephen Glaister, the director of the RAC Foundation, said.
"Through this move the Chancellor will lose about £1bn a year in duty and VAT income. But tens of thousands of people will be saved from being forced to give up their cars against a backdrop of generally rising running costs."
However, while the Freight Transport Association welcomed the Chancellor’s decision to cancel the fuel duty rise, it expressed disappointment the pleas of industry and consumers to reduce fuel duty have been ignored.
In its pre-Budget submission to the Chancellor, the 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 3p/litre, with commensurate reductions in the duty rate for gas oil.
“While we are relieved the immediate danger has passed," James Hookham, FTA’s managing director of policy and communications said, "in order to get the UK back on the road to economic recovery it is vital 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.”
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Jim McGill