FTA condemns Chancellor’s failure to abandon fuel duty increase21 March 2012
The Freight Transport Association says that the Chancellor's failure to cut fuel duty rates has condemned UK industry to suffer the consequences of even higher fuel bills at a time when the world price of oil stands at a four-year high – with every prospect of further price rises in coming months.
FTA chief economist Simon Chapman notes that the Chancellor intends to go ahead with plans for a 3p per litre increase this August, and is urging him to reconsider his decision.
"The Chancellor has squandered a very real opportunity to support UK industry, jobs and economic recovery, by his Budget policy on fuel duty," states Chapman.
"Independent research has shown that a cut in diesel duty of 2.5p per litre would have created an additional 175,000 jobs, with no loss of revenue to the Exchequer," he continues.
"But, in contrast, the fuel duty increase of 3p per litre, scheduled for August, will increase the average cost of lorry operation by around £1,200 per vehicle per year – all on top of other price rises that are inevitable as a consequence of the current and anticipated increases in the world price of oil."
Chapman is also concerned that the much heralded Fair Fuel Stabiliser has emerged as a "damp squib". Noting that it simply formalises fuel duty increases above inflation, if world oil prices fall below $75 per barrel, he says: "At the very least, what he should have done was to commit to freezing fuel duty when world oil prices were above $100 per barrel."
Freight Transport Association Ltd
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