Cut fuel duty by 5p, says FTA

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The Freight Transport Association has called on the chancellor to cut fuel duty by at least five pence per litre and scrap the increase planned for August. 

In its pre-budget submission to the Treasury, it argues that such action could save consumers and businesses £3.6 billion and prove to be a vital shot in the arm for the UK’s ailing economy.

James Hookham, managing director of policy and communications, said: “Never mind quantitative easing, cutting the still-disproportionately high amount we spend on diesel, which is, after all, a business essential, would be a simple and effective way to stimulate the economy.  The billions that industry and consumers will save over a year would be invested elsewhere in the economy, giving the impetus to growth that is so badly needed.”

The last budget saw two planned increases in fuel duty deferred and a cut in fuel duty of 1ppl, following a massive campaign. The move saved businesses some £500 million. 

Despite this the price of diesel increased by 7 pence per litre in 2011, adding £3,284 to the annual operating cost of a typical 44 tonne articulated vehicle.

The FTA’s budget submission calls for tax on road fuel gases to be fixed relative to diesel rates for at least five years to provide confidence for truck operators and investors to commit to use of lower emission vehicles.

The FTA has also suggested that a  time based lorry road user charge or UK Vignette could be used to address the uneven playing field between domestic and foreign hauliers.

Hookham said: “It is only right that foreign lorries pay for their use of UK roads.  But the industry’s support for a ‘UK vignette’ will be entirely contingent on how the Department for Transport can ensure that it does not impose additional costs on domestic hauliers; the only solution as far we can see is through a rebate on VED – the Chancellor needs to confirm this is what will happen in his Budget statement.  Until a workable rebate mechanism is confirmed by government, I expect our members’ reception for a UK vignette will be only lukewarm.”

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