Call to scrap planned fuel duty rise

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The Independent Online

Freight companies will urge Chancellor Alistair Darling today to scrap plans to increase fuel duty by 2p from 1 April.

The case for abandoning the planned rise is being put by representatives of the Freight Transport Association and the Road Haulage Association at a meeting with Mr Darling.

The 2p increase was first announced last year by the then Chancellor Gordon Brown.

Both associations believe that the big rise in petrol and diesel prices over the last few months - with pump prices now well over £1 a litre - has reduced the need for another increase.

In a letter to the Daily Telegraph today, the associations joined other organisations, including the AA, RAC Foundation and the British Chambers of Commerce, in calling for the April rise to be scrapped.

In the letter, the organisations say: "At 50.35p a litre, UK fuel duty for diesel and petrol is already the highest in Europe. Indeed UK diesel duty is double the EU average rate of 25p a litre. The Chancellor now plans to increase this by 2p per litre from April 1.

"Such an increase will generate further serious difficulties for the transport and forecourt industries, business drivers, those dependent on the car, and for businesses or individuals in remote or rural areas with no alternative transport options."

AA president Edmund King said: "Our analysis shows that the Chancellor has already bagged an unexpected windfall of more than £4 billion from motorists and the oil industry in the last 12 months and therefore even if he scraps the threatened 2p per litre increase, he would still be £3 billion better off.

"The record pump prices are already hitting those on low incomes, rural, disabled and many car-dependent motorists, so an extra increase would be unjust, unfair and unnecessary."

Roger King, chief executive of the Road Haulage Association, told the BBC Radio 4 Today programme: "For every penny increase it costs the average haulier with the average truck another £600 per year.

"Fuel costs are something you pay daily and you get the recovery from the customer... something like 30, 60 days later.

"It's the difficulty of financing the fuel bill that is at the core of the problem facing British hauliers."

Mr King said Mr Darling should delay any increases until the price of oil came down.

He called for "equal treatment" with foreign truck drivers, who he said pay up to 28 pence per litre less for their diesel on the Continent.

He added: "What we really want to see is a separate form of taxation for road transport as opposed to the motorist."

A Treasury spokesman said today: "In last March's Budget the Government announced fuel duty rates for the next three years, providing certainty for business, sending the right environmental signals in our fight against climate change, while continuing to fund vital public services.

"After these changes, by 2010 main fuel duty rates will be 11% lower in real terms than they were in 1999. The changes were made alongside reforms to Vehicle Excise Duty (car tax) that cut rates for less polluting vehicles, and a number of measures to support hauliers, which they have welcomed."