Osborne unveils emergency Budget
Deeper cuts forecast for public sector purchasing
Up in the air
Fuel buyers under fire for 'poor decision making'
Economic uncertainty fuels oil price volatility, says Opec
23 March 2011 | Lindsay Clark
The UK chancellor has cut fuel duty by one penny on a litre and
scrapped a system that adds to inflation annually, helping transport buyers keep
In today’s budget speech, George Osborne said that the fuel
duty escalator, which adds an extra penny on top of inflation every year, would
be cancelled for the rest of this Parliament – until 2015. At the same time he cut
the duty by one pence per litre.
In addition, he announced the inflation rise in duty, planned
for next week, would be delayed until next year, while the April 2012 inflation
rise would also be put back to the following summer.
Gordon Scott, managing director of UK transport supplier Wincanton
welcomed the cut. “It is clear that the current economic conditions will
continue to impact us all, but in the face of rising costs and uncertain market
conditions it is reassuring to see that the government has acknowledged the
critical impact that rising fuel prices can have on businesses.”
Osborne also told Parliament the government would delay this
April’s air passenger duty (APD) rise to next year, potentially keeping costs
down for travel buyers.
In November 2010, the
UK government increased APD by up to 55 per cent, making it as much as £170 for
ultra-long-haul premium flyers.
Reform to these air travel taxes was also on the agenda, Osborne
said. “We hoped we could replace the per passenger tax with a per plane tax,”
he said. “We have tried every possible option, but have reluctantly had to
accept that all are currently illegal under international law. So we will work
with others to try to get that law changed.”
In the meantime, he said the government was consulting on
how to change existing air passenger duty bands and bring private jets, which
pay no duty at all, into the scope of taxation.