Chancellor of the Exchequer, George Osborne

Chancellor continues fuel duty freeze but ‘could have done more’

When delivering his Autumn Statement to a packed House of Commons, the Chancellor of the Exchequer, George Osborne, announced that fuel duty is to remain frozen at 57.95 pence per litre, the level it has been at since 2011.

However, for many in the logistics sector Mr Osborne could have gone much further by delivering a real-terms cut in fuel duty.  In the run up to today’s announcement the FairFuelUK campaign, which is supported by more than one million members of the motoring public as well as the RAC, FTA, RHA, APN and UKLPG, reiterated its demand for a three pence per litre cut in fuel duty and called on the Chancellor of the Exchequer to have ‘the courage’ to implement such a measure.

Speaking in the wake of today’s speech by Mr Osborne, Quentin Willson, the FairFuelUK campaign’s spokesperson, expressing his disappointment: “The FairFuelUK Campaign welcomes the continual freeze in Fuel Duty by the Chancellor in today's Autumn Statement but his tax take is now approaching 70%.  He could have done more.  He knows along with the IMF that cutting fuel prices is good for GDP, new jobs and inflation.  He also did not call for an Oil Price Enquiry to investigate why the recent massive fall in oil prices have not been reflected similarly at the pumps in terms of the right amount and timing.  Marks out of 10 is 6.  Could do better.”

The Road Haulage Association has also been quick to express its disappointment that the Chancellor had not committed to cut in fuel duty.  Its Chief Executive, Richard Burnett, said: “Diesel represents more than a third of a haulier’s costs and UK fuel duty is the highest in the EU.  Because of this our European counterparts are operating at an unfair advantage.  A three pence per litre duty would have gone some way to levelling the playing field between the UK and the rest of Europe and would have represented a 3-4% reduction in costs to the haulier, enabling them to be more competitive.  Today’s freeze means that as a result of today’s low oil price, fuel duty now accounts for nearly 70% of the price of a litre of fuel.

“Another freeze will, for many, be seen as little more than a delaying tactic.  UK hauliers have to watch every penny; they can’t afford not to.  This is an industry where any increase in the price of fuel or the rate of fuel duty has to be passed on to the customer – ultimately increasing prices for business and consumers alike.  And if customers won’t pay, there is a real threat to the survival of the business.

“Despite the optimism shown by the Chancellor’s in this, the final Autumn Statement of the present Government, the UK’s economic recovery remains vulnerable.  The Road Haulage Association, together with its campaign alliance partners FairFuelUK, will continue to push for a fuel duty cut.  RHA-commissioned research by NIESR shows that a cut in fuel duty is good for growth and will create jobs.”

With oil prices still tumbling, George Osborne has disappointed motorists and the logistics industry by not taking the bold step of cutting fuel duty.  The reality is that the Treasury takes 67% of the cost of fuel at the pumps.  With the general election only five months away, the high level of fuel duty will remain a contentious issue for MPs battling to retain their seats – and I’m sure that many will be challenged on where they stand on the matter.

Michael Parry, Editor