Fuel Duty Rise Frozen for the Year

Fuel pumpThe Government’s proposed 3p per litre fuel duty rise for August has been suddenly frozen until January 2013.

The decision by the Chancellor of the Exchequer follows words only days ago from the Transport Secretary, Justine Greening, who rejected calls for a u-turn on the price increase.

Instead, Greening insisted that the 3p fuel duty rise would go ahead and that it was better to pressure the oil companies and retailers themselves into lowering pump prices.

FairFuelUK, the national campaign fighting for lower diesel and petrol prices, welcomed the decision, with Quentin Wilson, national spokesman for the organisation, saying:

“For months FairFuelUK has pushed, argued, pleaded and proved to the government that scrapping the August duty rise would be essential to the economic future of this country. Thankfully, the Government has listened and have acted for the good of struggling consumers across the UK. This is democracy at its very best where a government and a Chancellor can review decisions, and act with fairness and common sense. Businesses and hard-working families across this country will breathe a grateful sigh of relief, at least for the rest of this year. Well done to every MP and Minister who has listened.”

Peter Carroll, FairFuelUK’s founder added:

There are serious longer term issues to address on fuel taxation and pricing – but for today, we thank the Government for listening and acting.

The Road Haulage Association (RHA), which is a leading member of the FairFuelUK campaign, said it was delighted at George Osborn’s decision to abandon the 3p duty rise. Jack Semple, Director of Policy at the RHA, said of the move:

Today’s announcement will prevent further pressure being applied to the profitability and cash flow of UK hauliers in particular. The duty increase would have added £1,200 a year to the cost of running a truck.  More widely, the Chancellor’s decision will be welcomed by businesses and consumers across the entire economy.

The Chancellor noted that the change in date of the duty rise will stop £550 million flowing into the Treasury’s coffers but added that this would be found from Government efficiencies elsewhere.

Sir Mervyn King, The Bank of England’s governor, had said hwe was "pessimistic" about the UK economy’s outlook and the 3p u-turn certainly comes at a time when so many small businesses are "feeling the pinch".

Andrew Pendleton, head of Campaigns at green group Friends of the Earth, made an interesting point that oil prices will continue to rise, outting constant pressure on UK motorists no matter what the fuel duty escalator is, saying that:

"Motorists up and down the country will continue to pay a heavy price if ministers and motor manufacturers don’t take urgent action to wean our cars off their oil dependency."

"Ministers must help fast-track the production of electric vehicles and super-efficient cars that burn less fuel – and provide decent alternatives to driving, such as better public transport and safer cycling."

For more information on campaigning to keep the cost of petrol and diesel down, small business owners should take a look at FairFuelUK.


[Ed’s note: Rather than keeping £550 million OUT of the Government’s "war chest" the failed fuel duty rise actually keeps nearly half a billion IN the pockets of hard-pressed small businesses, haulage firms and owner-drivers instead.]

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