Fuel duty frozen for drivers as automotive industry displays its proposals for transport and roads

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Home Finance Reviews Under The Hood Motorsport Business Profiles Archive Related Tags: Finance Budget, budget 2013, SMMT, friends of the earth, road haulage association, CHANCELLOR, George Osbourne, Finance Fuel duty frozen for drivers as automotive industry displays its proposals for transport and roads By: Danny Hewitt Ref:A0228 Published: 20 March 2013 With Chancellor George Osborne announcing his 2013 budget today, motorists want cheaper road tax, reduced fuel duty, cheaper company car tax, investment to fix the millions of potholes across Britain's roads and car insurance that will not leave people wondering if they can afford to feed themselves each day. And with fuel duty being historically frozen again, drivers are jumping up and down across the country. There will also be two new company car tax bands for low emission vehicles. But what do industry bodies want from the budget? Here is their view. Fuel Duty Frozen

Quentin Willson, FairFuelUKThis is welcome news for families and businesses across the UK as far as it goes. It is a sign that the Government is listening, but there will be widespread disappointment that the cancellation of this duty rise gives them no immediate relief from climbing fuel prices. Cancelling a rise that really shouldn't happen is not enough. The Government needs to cut duty substantially to get the economic growth we all need.Society of Motor Manufacturers and Traders (SMMT) Fuel Duty Frozen

In the core of its submission to HM Treasury, SMMT and its 550 members call on government to ensure that key announcements in the Budget are fully aligned with industrial strategy priorities and reflect the automotive sector''s drive for growth.SMMT''s Interim Chief Executive, Mike Baunton said: "The UK automotive industry works very closely with government which, in recent years, has led to significant inward investment. However, we cannot be complacent. To ensure we remain one of the leading destinations for direct investment, and to build upon the commitments already made, it is imperative that the overall UK business environment is competitive and provides a distinct rationale and incentive for companies to invest. "SMMT calls on the Chancellor to spearhead a proactive government, support innovation, grow the low and ultra-low carbon vehicle market in the UK, and support opportunities in the supply chain; particularly in access to finance. We urge him to continue to develop the UK''s flexible workforce, and importantly, we need him and his colleagues in government to provide a strong voice in Europe."Specific actions SMMT calls for:Company Car Tax (CCT): SMMT calls for Mr Osborne to announce a revised set of CCT rates from 2015 with greater differentiation below 95g/km and significant levels of incentive for ultra-low carbon vehicles. SMMT has again called on government to review its Budget 2012 decision to change the writing-down capital allowance threshold for new vehicles.Carbon Reduction Commitment (CRC): Ensure that government''s energy efficiency schemes are not detrimental to the UK''s business environment and reverse the decision to remove the Climate Change Agreement (CCA) exemption rule from the Carbon Reduction Commitment (CRC) scheme.Support the Automotive Advanced Propulsion Centre: Ensure science and innovation funding reflects key UK industrial strengths, has a scale that is internationally competitive and is delivered through tried and tested routes such as the Technology Strategy Board or centres of excellence. SMMT calls on government to indicate in Budget 2013 that it supports the creation of a joint government-industry funded Automotive Advanced Propulsion Centre of Excellence.Support a stronger supply chain: Commit to the Regional Growth Fund and Advanced Manufacturing Supply Chain Fund and put them on a permanent footing - to provide confidence and support for supply chain companies.Support investment: Build upon the welcome two-year increase in the Annual Investment Allowance by making the support permanent, moving it from a short-term boost to a long-term mechanism that influences investment decisions and provides certainty and business confidence.Campaign for Better TransportReacting to the Budget statement, transport group Campaign for Better Transport has warned that spending cuts to pay for large capital schemes could result in more potholes and worse bus services.Stephen Joseph, Chief Executive, Campaign for Better Transport, said: "Freezing fuel duty does nothing to help the millions who rely on public transport. Bus services are seeing year on year cuts and Government is still committed to above inflation rail fares rises. It's scandalous that George Osborne has once again failed to support public transport. "The Chancellor is promising more wasteful big road schemes rather than fixing potholes and supporting better bus and rail services. This would create jobs now, help all road users and give more people access to jobs."Friends of the EarthThe top priority must be to take an evidence-based and precautionary approach towards high-carbon investment or assets that risk being stranded by environmental pressures. That means new road building – for which the Chancellor is likely to reach – should be forsaken. In the UK car use appears to have peaked, with evidence that people are driving less often and less far, and fewer young people are learning to drive. This undermines the economic rationale behind new road building. A better option is repairing existing roads, which can be undertaken much more quickly, have more favourable economic cases, and provide the economic boost the Chancellor needs.Petrol prices are soaring due to global oil prices and the depreciating pound. Fuel duty is a convenient scapegoat but duty is lower in real terms than at any time since 2001. Over the past two years the Chancellor has deprived the public finances of more than £5 billion by not raising fuel duty in line with inflation. The Chancellor will once again face pressure to scrap the planned September increase in duty (the original inflation-matching rise first scheduled for April 2011). With so much of the Chancellor's failing credibility resting on the health of the public finances it is hard to see how he can continue to cut fuel duty in real terms, while public services continue to face the spending axe. Money is desperately needed for alternatives to the car at a national level and in towns, cities and rural areas across the UK. The Chancellor must act on eye-popping rail fares and reversing cuts to local transport funding and bus subsidies.Road Haulage AssociationThe Road Haulage Association, represents 7,000 transport operators who, between them, run approximately 100,000 HGVs and provide vital services across the UK economy, has urged the Chancellor to consider several key points that are critical, both to the future of the UK road haulage industry, and to the future prosperity of the rest of the United Kingdom.We strongly urge the Chancellor as a minimum to cement the current policy of not increasing the rate of diesel duty for the remainder of this Parliament. FairFuelUK has demonstrated to HM Treasury, using a report by the National Institute of Economic and Social Research (NIESR), funded by the RHA, that cutting fuel duty would boost both growth and employment.1. A commitment to no further increases in diesel duty this Parliament - a reduction will boost growth and employment.2. A commitment to increasing the effectiveness of HMRC efforts to combat diesel duty laundering and fraud - which undermines legitimate road hauliers.3. Announce a clear, long-term, SME-friendly Treasury policy on methane (natural gas and bio-methane) as an HGV fuel, and other alternative fuel technologies.4. Stronger actions to promote prompt payment by large companies, through public sector procurement and the creation of a new reporting requirement in large companies'' annual report and accounts.The key concern in 2013 was said that haulage rates remain under pressure. There remains a relentless pressure to contain and reduce costs and this will remain the industry's focus. Many firms – but far from all - have some linkage to fuel prices in their haulage rates for some or all of their work and note that significant increases in this cost will be recovered to some extent (or rates reduced, should prices fall significantly). That apart, we have had an emphatic "No" in response to whether they will be able to raise haulage rates, with very large customer companies said to be especially difficult.We urge far greater clarity of Treasury policy, to enable all hauliers but especially those in the SME sector to have greater clarity over the issue of methane as a truck fuel. In essence, the industry is keen to have a greater understanding as to the extent to which the Treasury is prepared to subsidise gas and dual fuel trucks using taxpayers' money. At present, the industry is in the dark.We urge a clear, long-term, SME-friendly taxation policy on methane as an HGV fuel, encompassing duty rebate and any enhanced allowances; and on allowances for hybrid HGVs. 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