The FTA has welcomed the freeze in fuel duty announced by the chancellor George Osborne in today’s Budget, but believes he missed an opportunity to boost the economy by not cutting it.
James Hookham, FTA managing director of policy and communications, said: “The chancellor has kept his promise to freeze fuel duty and industry will be £187m a year better off for that.
"But he missed the opportunity to stimulate the economy further by reducing fuel duty and putting around £690m 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, the 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.
FTA estimates that every penny of fuel duty costs operators £116m a year, and a 3ppl cut would have saved around £350m a year for “an industry that all British businesses rely upon”.
The trade body added that evidence has shown 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.
