Even though taxing poor grannies grabbed the headlines, there was plenty of noise coming from motorists. Many expressed disbelief over George Osborne’s refusal to stop an increase to fuel duty. A 3.02 pence per litre fuel duty increase will take effect on 1 August as planned, it was confirmed in yesterday’s Budget. It means the cost of filling a Ford Mondeo with a 70-litre fuel tank will increase by £2.54, adding around £60 to the annual fuel bill.
Geoff Dunning, Chief Executive of the Road Haulage Association said: “The Chancellor’s decision to go ahead with this rise is not only disappointing, the reason behind it is hard to understand.”
He added business was likely to suffer as a result: “Diesel fuel is now the most expensive it has ever been – the RHA’s weekly fuel price survey last week hit an all-time record high and yet the Chancellor will be driving costs up by another £1,200 a year for a large truck – costs that hauliers must now set about trying to recover from their hard-pressed customers.”
The Chancellor also confirmed fuel duty would not rise faster than inflation, unless oil prices were to fall below £45 a barrel, well below crude oil’s current market price of about $125 (£79) a barrel. He said his measures in fact “eased the burden” on motorists by £4.5 billion.
Others have suggested this policy move could hurt the Coalition. Quentin Willson, national spokesman for FairFuelUK said jobs were now at stake as a result: “This is a mortal wound for this Government’s policies and its credibility. We showed them that cutting fuel duty by 2.5p would create 175,000 new jobs – how many jobs will be destroyed when the Government slaps 16p per gallon on in August?”