News

The transport industry can breathe a sigh of relief: Chancellor Alistair Darling has deferred the 2p/litre fuel duty hike until October. However, confusingly he said that fuel duty will rise by 0.5p in real terms (ie. over the rate of inflation) "for environmental reasons" in 2010. He acknowledged the massive increases in the cost of all forms of power and noted: "We will do everything in our power to maintain stability [of the economy]."

Stobart Group chief executive Andrew Tinkler welcomed  the news: "Today’s announcement will come as a welcome relief to consumers around the country who have been forced to foot the bill for the rising cost of fuel over recent months. Whilst the Stobart Group works with our customers to share the burden of rising fuel prices, increases are always felt most by ordinary consumers during their weekly shop, as our customers are forced to pass on the rising cost of fuel."

FTA director of external affairs Geoff Dossetter said: "The high price of fuel impacts on not just the transport industry but the whole of UK industry as world prices go through the roof.  In turn these increased prices must be passed to consumers. For the Chancellor to have added to this pain by seeking further taxation would have been unthinkable. "But as the price of oil continues to rise, he must continue to keep his foot off the fuel duty accelerator – the proposed 0.5p/litre above inflation increase from 2010 can be no more than speculative."

Dossetter  added: "Now the work begins on securing further deferment after 1 October, bearing mind the enormous rises in the price of oil. There’s still great trouble ahead and a further deferment is absolutely essential." The FTA claims that the six-month deferment will save industry some £140m. Road pricing remains on the agenda: "In the longer term road pricing could reduce congestion in the future as well as helping our wider environmental obligations. I am setting aside new funding to develop national road pricing technology," Darling said. The government will ask the private sector to run a number of projects based on charging by time of day, distance traveled and route chosen. These projects test the impact of financial incentives on driver behaviour.

Darling said he would ask the Climate Change Committee to review the government’s target of a 60% cut in carbon emissions by 2050 and consider a greater reduction of 80%. New non-domestic buildings should be zero-carbon by 2019. Funds available through the small firms’ loans guarantee will increase by 60% in the next year. In reference to the state of UK plc, Darling downgraded his forecast for growth of the economy: 1.75% to 2.25% this year, followed by 2.25% to  2.75% in 2009. Corporation tax will fall from 38% to 28%, while the capital gains tax changes were confirmed.