Manchester motorists will feel some relief at the pumps after Chancellor George Osborne’s Budget announcement that he was scrapping September’s planned fuel tax rise.
Although the rise was reported to be at 3p per litre, Budget documents suggest it was only due to be 1.89p – although this has now been cancelled.
The decision has delighted motoring groups who were putting increasing pressure on the government to freeze tax increases as families struggled with car costs.
“This news provides breathing space for families being smothered by the soaring costs of motoring,” said Professor Stephen Glaister, director of the RAC Foundation.
“Especially the 800,000 households spending more than a quarter of their income on operating a vehicle.
“Through this move the Chancellor will lose about £1 billion a year in duty and VAT income, but tens of thousands of people will be saved from being forced to give up their cars against a backdrop of generally rising running costs.
“It is welcome that George Osborne has listened to the concerns of the nation’s 35 million motorists about the inflammatory issue of near-record pump prices.”
The duty on a litre of unleaded petrol or diesel will now remain at 57.95p until at least September 2014, but AA president Edmund King believes this come as a relief to motorists rather than reward.
“A September fuel duty hike would have been the last straw likely to break UK drivers’ budgets and would have led to a summer of discontent,” he said.
“Scrapping the fuel duty hike is a pragmatic move and will bring some relief at the pumps. Already 76% of AA members are cutting back on journeys, household expenditure or both, due to the high cost of fuel.
“Drivers will welcome the scrapping of the fuel duty hike with relief rather than with joy. Prices are almost 5p a litre higher than when the Chancellor froze fuel duty in March 2011.”
Meanwhile, David Brennan, managing director of LeasePlan, the world’s leading provider of fleet management services, is calling for the government to commit to an indefinite freeze of the tax.
“I would now call on the government to build on this decision and commit to an indefinite freeze of the tax,” he said.
“The economy is heavily dependent on the hundreds of thousands of journeys made by business drivers every day.
“With the majority of all new car registrations in the UK now accounted for by fleet vehicles, the government must realise how important this sector is to the wider economy, and how damaging tax hikes can be.”
Image courtesy of Rama, via Wiki Commons, with thanks.