The one penny above inflation price hike could have left industry facing an additional annual bill of up to £500m, the FTA said. The reduction in fuel duty levels, and delay in future increases until next year; coupled to the freezing of lorry Vehicle Excise Duty will give hard pressed vehicle operators some much needed breathing space.
Simon Chapman, FTA’s chief economist, said: “This is a key win for FTA and will result in a fairer fuel deal for its members. Our primary goal coming into this Budget was to see the fuel duty rise in April scrapped and for a fairer deal for our members and all road users in difficult trading conditions. Clearly, Mr Osborne has listened to our concerns and recognises that for economic growth to be sustained, then freight transport is needed to keep shop shelves filled and businesses supplied.
“By cutting fuel duty by 1 penny per litre, the Chancellor has effectively saved industry £125m this year. FTA fought hard for future fuel duty rises to be set on a budget-by-budget basis with decisions reflecting world oil prices. His plans to cancel the fuel duty escalator while oil prices are above $75 heeds our call to stabilise the impact of volatile prices and takes future uncertainty out of a key component of our members’ costs.”
In its pre-Budget submission, FTA also asked for lorry Vehicle Excise Duty to be left unchanged which is a direct tax on UK freight operations.
Chapman concluded: “Times are incredibly tough in the logistics sector right now, with carriers unable to recoup rising costs and facing a cash flow squeeze. The Chancellor is right to recognise that going ahead with an above inflation fuel duty policy would have been suicidal for the UK’s economy. His decision to keep VED levels unchanged shows how intently Government has listened to us, for which they should be congratulated.”
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