In last year’s Autumn Statement Mr Osborne said that he was cancelling the 2p-a-litre rise due next September and would be freezing fuel duty until May 2015. This was confirmed in today’s speech.
The Chancellor also promised a £200m pothole repair fund although local councils will need to take part in a competitive bidding process. IAM director of policy and research Neil Greig said in response: 'Every little helps and it will be welcomed in many areas hit by this year’s bad weather. With a ten billion pound back log in repairs however, it is only through consistent long-term funding that the pothole problem can finally be fixed.'
Commenting on the announcement about the fuel duty freeze, Andrew Hogsden, senior manager, strategic fleet consultancy at Lex Autolease, said: ‘Fuel costs remain a significant overhead for businesses that operate vehicle fleets. Although the pledge to freeze fuel duty for the remainder of this Parliament was a step in the right direction, we would have liked to see the Chancellor go further and announce a cut in fuel duty. Reducing this burden would provide business with a much needed cashflow boost as they look to capitalise on the opportunities presented by the recovering economy.’
Meanwhile RAC technical director David Bizley said: ‘George Osborne is one of the few chancellors who has actually reduced fuel duty by cutting a penny off in the 2011 Budget instead of just putting it up like most of his predecessors, and we had hoped he would see the wisdom in doing so again, but sadly that hasn’t happened.
‘Fleet drivers, and those responsible for maintaining fleets, will benefit from a further freeze and help prevent the hardship felt from high fuel prices getting any worse – but a cut in duty was needed to reverse this punitive charge, which is effectively a tax on virtually every British business that uses vehicles.
‘Along with the FairFuelUK campaign we wanted to see a radical and much-needed 3p a litre cut in fuel duty as we believe this would do far more good for the economy than simply freezing it. The economic benefits of a fuel duty cut have been clearly demonstrated in the reports produced by the Centre for Economics and Business Research as well as the National Institute of Economic and Social Research.
‘We can only hope Mr Osborne is saving the best news for the autumn in the form of a vote-winning duty cut ahead of next year’s election.’