Fuel duty freeze: good but not great

Fuel Duty Freeze: Good but not Great
Whilst the Chancellor’s announcement to freeze fuel duty in yesterday's Budget has been welcomed by the Freight Transport Association, it has also expressed disappointment that he did not take the opportunity to reduce fuel duty.

Missed opportunity

The Freight Transport Association (FTA) has said that George Osborne has missed the opportunity to boost the economy by introducing a reduction in fuel duty by 3 pence per litre. In its pre-Budget submission, the FTA told the Chancellor that a reduction would make an important contribution towards protecting the UK economy.

Boost

James Hookham of the FTA said: “A further freeze of duties is welcome but the Chancellor missed a chance to give a boost to the stuttering economy by reducing the tax on an essential business input.”

Benefits

As part of its pre-Budget submission, the FTA asked the Chancellor to consider the economic benefits that could be delivered by further development of the government’s approach to fuel duty. The Association said that reducing road fuel duty would ease cost pressure on businesses operating commercial vehicles and stimulate economic growth.

Figures

FTA figures estimate that every penny of fuel duty costs commercial vehicle operators £120 million a year, and a 3ppl cut would have saved around £350 million a year for an industry that all British businesses rely upon.

As a founder member of FairFuelUK, the FTA has been campaigning for a 3p per litre cut in fuel duty. Industry currently pays around £7 billion annually in duty and an increase of just one penny would add £470 a year to the cost of running a 44-tonne truck, which would have a huge impact on transport operators.