The chancellor has frozen fuel duty in his Autumn Statement today, meaning the scheduled rises scheduled for January and April next year will no longer take place.
George Osborne gave no hint of a cut but said fuel would only see “inflation only rises” until September – effectively meaning the April 2013 increase has been deferred to 1 September 2013.
PriceWaterhouseCoopers forecast the move would cost the public coffers £6bn, although research commissioned by campaign group FairFuelUK argued the planned 3ppl increase would have led to 35,000 job losses and reduced GDP growth by 0.1%.
“I want to keep fuel [down],” the chancellor said earlier today. “Some have said the 3ppl rise planned for January should be postponed: we will cancel it all together. This will help business/ It means that under this government there have been no increases in [fuel] taxes in two and a half years.”
FFUK tweeted after the announcement: “Fantastic news. Three pence duty cancelled not deferred. The fight goes on for a cut.”
FTA MD of policy and communications, James Hookham, said the scrapping of the January duty rise was "brilliant news - exactly what we wanted him to do".
However Hookham added: "what we were hoping he might do, however, was abandon all future increases for the rest of this parliament. Since that hasn't happened, the fight over fuel duty will obviously continue."
Harlow MP Robert Halfon, founder of Petrol Promise, said he was delighted that the chancellor had listened and frozen fuel duty.
Industry reaction to fuel duty freeze:
Quentin Willson of FairFuelUK said: "FairFuelUK has worked tirelessly to convince MPs and ministers that the 3p rise would be enormously damaging to the economic recovery. To their credit the treasury and the chancellor have engaged constructively and have made the right decision.
"The cancellation of the 3p rise completely is a welcome surprise, it would have cost 35,000 jobs and hit growth. Fantastic news but the fight for fairer fuel pricing goes on for the sake of hard pressed businesses, the public and to stimulate growth in the economy," he added.
RHA chief executive Geoff Dunning said: “The chancellor’s announcement that he intends to cancel the fuel duty rise that was planned for January comes as a welcome surprise. However, 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 than 1%? Despite this ours is the industry on which the rest of the economy is almost entirely reliant.
Ian Stuart, group MD at ATS Euromaster, which runs 1,200 vehicles, said: “We’re technically out of recession, but the country is still desperately trying to get back on its feet and the cost of fuel is dragging businesses and motorists down. Scrapping the fuel duty increase is a positive step; but a 3-6ppl reduction would have given the country a far bigger boost.”
Autumn statement highlights for the road transport industry:
• £1bn of investment in road infrastructure promised: primarily for the A1 to motorway standard between London and Newcastle, an A5-M1 link, duelling the A30 and upgrading the M25 in Essex as a result of the DP World container port development.
• Small business rate relief extended until April 2014.
• Top limit of £250,000 annual rate relief for investment in plant and machinery – a ten-fold increase.
• Corporation tax rate set at 21% from April 2014. A cut of 1%.
• Whitehall departmental resources down 1% in 2013, 2% in 2014 and Osborne highlighted the need for government departments to rationalise their estates.
• Growth forecast – negative growth of 0.1% this year; 1.2% growth in 2013: 2% in 2014; 2.3% in 2015: 2.7% in 2016 and 2.8% in 2017.
• 250,000 extra tax inspectors to go after £7bn of suspected tax avoidance.
• New business bank gets £1bn extra funds.