The Freight Transport Association has welcomed the freeze in fuel duty confirmed by the Chancellor in today’s Budget, but has expressed disappointment that he has not taken the opportunity to boost the economy by reducing fuel duty by 3 pence per litre.
James Hookham, FTA Managing Director of Policy and Communications said:
"The Chancellor has kept his promise to freeze fuel duty and industry will be £187 million a year better off for that, but he missed the opportunity to stimulate the economy further by reducing fuel duty and putting around £690 million into the pockets of families and British business. This could have given a further stimulus to the economy and locked in the positive growth already achieved."
As part of its pre-Budget submission, FTA asked the Chancellor to consider the economic benefits that could be delivered by further development of the government’s approach to fuel duty. The association said that reducing road fuel duty would ease cost pressure on businesses operating commercial vehicles and stimulate economic growth.
According to FTA figures it is estimated that every penny of fuel duty costs commercial vehicle operators £116 million a year, and a 3ppl cut would have saved around £350 million a year for an industry that all British businesses rely upon.
Evidence has shown that the UK economy would benefit from such a reduction by generating at least 70,000 jobs, increasing GDP by 0.2% and helping lower inflation.*
* Source: National Institute for Economic and Social Research (NIESR) and CEBR.