Road tax ring fenced and fuel duty freeze maintained
In the Emergency Budget George Osborne has maintained the freeze on fuel duty, as expected and ring-fenced the £6 billion per annum revenue from road tax.
This means the money will be used exclusively for road repairs.
James Stamp, head of transport at KPMG UK said: “In the last budget, the Government announced a major road investment program worth £15billion. Today, the Chancellor announced that road tax (VED) income will be “ring fenced”. This provides some clarity about where funding for the ambitious road projects will be found.
“However, we note that while road tax raises around £6 billion per year, this is dwarfed by income collected from fuel duty which is around £27 billion. We believe that more of this income should be reinvested in roads and transport infrastructure in line with the Chancellor’s statement that money raised from drivers should be spent on the roads they drive on.”
The Freight Transport Association says common sense prevailed with the Chancellor’s Budget announcement of a freeze on fuel duty, but that it will continue to campaign for cuts on behalf of its members.
James Hookham, FTA’s Deputy Chief Executive, said: “The Chancellor has listened to the voice of industry by keeping fuel duty at current levels, which is to be welcomed. However, the Government has emphasised that its primary objective is to protect the UK economy. We believe that reducing fuel duty would make a huge contribution to this objective and we will continue to campaign with FairFuelUK for a 3 pence per litre cut in order to stimulate economic growth.”
The Association, which has 14,700 members in the logistics industry, says falling fuel prices have been a major factor in the country’s recovery. But high taxes mean transport operators haven’t benefited, with only a 13% cut in prices at the pump despite a 43% drop in world oil prices.
HGV driver crisis
The absence of financial measures to support the UK’s road haulage industry to recruit and train truck drivers in today’s budget would undermine the economic recovery warned the Road Haulage Association (RHA).
The absence of financial measures to support the UK’s road haulage industry to recruit and train truck drivers in today’s budget would undermine the economic recovery warned the Road Haulage Association (RHA).
Richard Burnett, Chief Executive of the RHA said: “In his Spring Budget George Osborne recognised the shortage of HGV drivers and pledged action to help. This Budget does nothing to help solve the crisis, despite strong representation from across the industry. He has even failed to support the structure put in place by the RHA and JobCentre+ to get unemployed people into driving.
“By the end of 2016 we will be some 60,000 drivers short if action is not taken now. We are working hard to address the problem and we have a quality process in place for getting unemployed people work experience in the industry and if suitable, a route into full time employment. This scheme is called Driving Britain’s Future but this alone will not solve the problem. We need specific targeted funding before it is too late.
“The RHA will continue to work closely with the Treasury and other government departments to ensure the Chancellor keeps to the pledge made in the March Budget.”
