Fuel duty freeze welcomed, but issues remain

Michael Parry
Editor at Logistics Insight
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Post date: Tuesday, 3rd July 2012

Back in 1964 the late Harold Wilson declared that 'a week is a long time in politics'. Now the former prime minister's now famous quotation immediately springs to mind when reviewing the events over the past few days with regard to the now deferred increase in fuel duty.

Only a week ago David Cameron and George Osborne seemed to be on a collision course over whether the measure planned for 1 August should be implemented or not. But the issue came to a head on Tuesday when the shadow chancellor of the exchequer, Ed Balls, declared in an article in the Sun newspaper that he would force a vote in the House of Commons with the intention of quashing the planned hike in fuel duty and, as a consequence, bring further embarrassment to the beleaguered government.

In many respects, as events unfolded, neither the government nor the opposition covered themselves in too much glory. 

It soon became all too obvious that even some cabinet ministers had not been told by the chancellor that he was going to announce the deferral in the House of Commons (even though there had been a Cabinet meeting earlier in the day!). 

It could be argued that Justine Greening, who only last Monday was in favour of urging petrol companies to reduce the cost of fuel, and Chloe Smith, who came under intense scrutiny when she faced the television cameras on Tuesday evening, were hung out to dry by George Osborne.

As for the Labour Party, Ed Balls claimed that by deferring the fuel duty increase for the rest of the year the chancellor had performed the ‘fastest U-turn in history. However, in response, David Cameron has been keen to point out that the move was not a U-turn as it was getting rid of a Labour tax rise.

With all the excitement in the corridors of power the role played in all of this by the Fair Fuel UK campaign and its supporters could easily be overlooked. 

The pressure group's petition in favour of scrapping fuel duty increases has gathered more than 300,000 supporters and an increasing number of MPs have indicated their support for the cause. 

Following the chancellor's announcement, Peter Carroll, the founder of Fair Fuel UK, was quick to thank the many thousands of individuals who had signed up to support the campaign and the leading organisations, which have offered constant support, in particular the RAC, the Road Haulage Association, the Freight Transport Association and The Fuelcard Company.

However, Peter also emphasised that there are ‘serious longer term issues to address on fuel taxation and pricing’.

Indeed there are. By deferring the fuel duty increase until January, George Osborne has given himself a little breathing space in the run up to his Autumn Statement. Motorists and the hard pressed road delivery sector need a permanent solution to this ever recurring issue. 

The chancellor should take note that Fair Fuel UK has galvanised support from across the political spectrum and caught the imagination of the general public.

The message must be that a short-term fix will not resolve this recurring problem.

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