FTA: fuel duty hike would be ‘irresponsible’

Ahead of the chancellor George Osborne’s Budget statement on Wednesday 16 March, the Freight Transport Association (FTA) has warned that a fuel duty increase would be “economically irresponsible”.

The statement was issued in response to a report by the Institute of Fiscal Studies, which suggested that Mr Osborne may be forced to raise forecourt prices in order to meet his £3 billion deficit elimination pledge.

FTA said the move would hinder economic recovery and weaken confidence, claiming that reductions in fuel duty would stimulate growth.

“Regardless of the price of oil, for every penny fuel duty goes up it costs truck and van operators around a £100 million in a full year,” said deputy chief executive James Hookham.

“It won’t make them drive any less – goods still need to move to where they are needed – and it won’t help them invest in making their vehicles and drivers even more efficient.  It will just cost them a lot of money.”

FTA argued that the freezing of fuel duty since 2011 had spared truck and van operators of the “economically stifling effects” of the tax – which has allowed them to hire more staff or invest in other goods, thereby aiding economic recovery.

“All this additional spending has actually generated more income tax and VAT, so fuel duty freezes are never as costly as the headline figures suggest,” Mr Hookham added. “The Treasury even published a paper in 2014 that proved this.”