Today’s decision by Chancellor George Osborne to cancel – not merely postpone – a proposed 3p/ litre rise in UK fuel duty in January 2013 has been described by the Road Haulage Association as a ‘welcome surprise’.

Geoff Dunning, RHA chief executive said; “We are pleased that the Chancellor has taken notice of the mass voice of users of road fuel, and in particular, the thousands of road hauliers, who are suffering as a result of record levels of UK fuel duty.

“Today’s news will mean a happier Christmas for motorists and hauliers alike. Let us hope that it will also mean a prosperous New Year.

“Though welcome, the fact remains that for many hauliers, this latest move will only be seen as a delaying tactic. UK hauliers are tremendously resilient. What other sector of UK industry can survive on profit margins of, in some cases, less 1%?

“ Despite this, ours is the industry on which the rest of the economy is almost entirely reliant. We deliver the raw products to the processing plants, we put the bread of the shelves of the supermarkets and we deliver the parts needed by the manufacturing industries. In effect, we deliver daily life.

“That is why a fuel duty cut was so essential. It will free-up personal finances that can be used to give the economy as a whole the shot in the arm it so desperately needs.

“The Road Haulage Association has commissioned research into a long-term, workable solution that demonstrates how a 3ppl cut in fuel duty will create a net gain of 70,000 jobs and a GDP growth of 0.2% We know what the problems are and we have a workable solution. But it needs to be put into practice now”.

Other welcome news for the industry included the Chancellor’s announcement there will be an extra £1 billion pound investment in roads  to upgrade  key sections of the A1, bringing the route from London to Newcastle up to motorway standard,  linking the A5 with the M1, dualling the A30 in Cornwall and upgrading sections of the M25.

And Annual Investment Allowances will be increased tenfold from £25,000 to £250,000 from January, for two years. This is a complete policy U-turn – it was only in April that  this allowance was slashed from £100,000 to £25,000.

But we want more, say fta

The Freight Transport Association also welcomed the cancellation of the fuel duty rise, but is disappointed that the Chancellor did not go further and abandon all planned rises before the next election and move to reduce fuel duty by 3p/ litre.

James Hookham, FTA’s Managing Director – Policy & Communications, said; “This early Christmas present from the Chancellor is a good start, but we will not let this issue go. Spiralling fuel costs have a devastating impact on haulage businesses, their customers and ultimately everyone through the price of goods on the shelves, and the campaign for a fairer deal will continue.

“January’s rise would have cost a 10-vehicle freight operator around £14,000 – which could be one employee’s wages. While we are relieved that the immediate danger has passed, in order to get the UK back on the road to economic recovery it is vital that we have a cut in fuel duty and a long-term strategy to prevent future rises and uncertainty.”