Chancellor George Osborne has cancelled the fuel duty increase due in September next year, in his Autumn statement.
But the Freight Transport Association was quick to respond – arguing that he should have done more.
Chief executive Theo de Pencier said: “George Osborne’s announcement today is good but not good enough. While FTA is delighted with the Chancellor’s confirmation that fuel duty will be frozen next year, we would have liked more, with a cut in fuel prices rather than just a freeze. As with all government announcements the devil is in the detail, and we would have liked the Chancellor to commit to making vehicle excise duty stable.”
The fuel duty freeze is expected to save industry some £186m, However, the FTA pointed out that two studies – the first by the Centre for Economics and Business Research and the second (on the Treasury’s recommendation) by the National Institute for Economic and Social Research – have shown that a change of approach could deliver significant benefits including creating jobs, boosting GDP, and in some circumstances, delivering a net increase in tax revenues.
The modelling shows the effects to be optimised at a reduction of 3ppl.
De Pencier welcomed the decision to maintain the differential between the main rate of fuel duty and the rate for road fuel gases such as Liquefied Natural Gas (LNG) and Compressed Natural Gas (CNG) for ten years.
This would provide businesses with the certainty they needed to invest in alternatively fuelled commercial vehicles.