Government must scrap fuel duty increases

The Government must recognise and acknowledge the terrible impact on UK industry and motorists of rapidly increasing oil prices and quickly engage with industry and road user representatives to identify means of relieving the problems. As an absolute minimum the Chancellor must immediately scrap the 2p per litre fuel duty increase planned for October, together with similar proposed increases planned for 2009 and 2010.

This call comes from an alliance of UK industry trade associations and motoring groups representing hundreds of thousands of companies and millions of motorists including the AA, British Association of Removers, British Chambers of Commerce, Confederation of Passenger Transport, Federation of Small Businesses, Forum of Private Business, Freight Transport Association, National Farmers Union, Petrol Retailers Association, Road Haulage Association and UK Warehouse Association.

Higher diesel costs are seriously disrupting industry’s transport budgeting, planning and management with fuel now constituting some 40 per cent of vehicle operating costs. This increase in transport costs must inevitably be reflected in end prices for consumers, generating a key and unwelcome ingredient in rising inflation.

Fuel costs for motorists are now unacceptably high for essential car journeys whether for commuting, business, school, shopping or social reasons. A recent survey showed that 64 per cent of motorists had cut back on motoring and other areas of spending as a direct response to high fuel prices. (AA Populus Panel 14 March–6 April 2008 – 17,500 respondents). Many people living in rural areas have no alternative transport and travel up to twice as far to work than their urban counterparts.

The Government has failed to demonstrate that it has understood the serious impact of oil price rises on UK industry and has so far shown no interest in tackling the problem. The movement of people, and the delivery goods and services, are key factors in the economy and in the daily needs of the whole population. The price of oil is dramatically changing these processes to the detriment of all, seemingly without any concern from the Government which has done nothing to help except to postpone its proposed 2p per litre duty increase from April until October. It seems to lack any appreciation of the scale and depth of the difficulties and appears bereft of any overall strategy on the vital supply and price of petrol and diesel.

The Government’s insensitivity and continued failure to deal with these problems is unacceptable and must be corrected without delay.