Chancellor cancels fuel duty rise

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Chancellor George Osborne has cancelled the 3.02 pence per litre rise in fuel duty that was due in January, as part of a package of measures designed to promote growth.

In the autumn statement, he also announced that the government would be investing £55m into the Strategic Rail Freight Network.

The decision on fuel duty follows a sustained campaign by FairFuel UK, the Freight Transport Association and the Road Haulage Association.

The FTA said that the increase would have added £325 million to industry’s annual fuel bill.

Chief executive Theo de Pencier said: ““Today’s decision will help to keep the wheels of industry turning and shows that government has listened.  However, the chancellor has not been bold enough.  He should have ruled out the planned three pence per litre duty rise in August 2012 as, if world oil prices remain high and above $100 per barrel into next year, it will still hit industry hard.”

Retailers also welcomed the move. “Imposing no rise in January is welcome help for hard-pressed customers and businesses already suffering big increases in many of their costs. This should help confidence. But the Chancellor must continue to be flexible. If oil prices remain high he should stand ready to drop entirely the increase he is postponing until August,” said British Retail Consortium director general Stephen Robertson.

“Downgraded forecasts make it all the more vital that the Chancellor implements a credible plan for stimulating economic growth which helps retail in keeping inflation down and generating jobs, especially for young people.”

George Osborne also announced the government would be investing £55m into the Strategic Rail Freight Network saying that the funding would help deliver schemes that remove bottlenecks and improved capability and longer term connectivity to the UK’s major ports.

The additional investment will be used to double the track between Ely and Soham, and to gauge clear the route between Syston Junction and Stoke; promoting the growth of rail usage on vital links to deep sea ports.

RFG Policy Manager Maggie Simpson welcomed the news saying: “Investment in the Strategic Freight Network is helping rail operators to grow their businesses and become more efficient. This additional investment will deliver welcome benefits for the sector.”

6th December: Peter Quantrill, director general of the British International Freight Association, said: “The announcement that the increase in fuel duty planned for January 2012 will not go ahead is good news for our members’ bottom lines. However, we would still like to see the introduction of an essential user rebate and a review of the fuel duty increase planned for August 2012.

 “The Government’s decision to invest in road transport infrastructure is also welcome news to our members given the importance of the road haulage mode in the collection and delivery of customers’ cargoes. However, we remain concerned that the road widening schemes do not cover sufficient areas of the country between which our members offer freight trunking services.”


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