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Fuel duty freeze is 'no give-away'

Wed, 02 Oct 2013

MOTORING GROUPS have given a cautious welcome to Chancellor George Osborne's announcement of a freeze on fuel duty until May 2015.

But Transport Secretary Patrick McLoughlin's insistence on the value of HS2 to the UK cut little ice with opponents of the high-speed rail scheme.

On fuel duty, both the AA and the RAC pointed out that Mr Osborne was already getting big sums from motorists in taxation.

Professor Stephen Glaister, director of the RAC Foundation, said: "Transport is the single biggest area of household expenditure bar none and our own research shows that 800,000 of the poorest households are in transport poverty, spending a quarter or more of their income on running a car.

"This proposal will be welcomed but let's not forget that the Chancellor still takes 60% of the price of a litre of fuel in the form of taxation."

AA president Edmund King said: "Two thirds of drivers still have to cut back on journeys or other household expenditure due to the high cost of petrol so a freeze on duty would be welcome.

"However, it is worth remembering that every time there is a spike in fuel prices the Chancellor brings in money due to the 20% VAT rate on petrol and diesel. This is not exactly a give-away as even with a duty freeze the Chancellor is still raking in approximately 60% of the pump price in duty and VAT."

On HS2, Emma Crane, director of the HS2 Action Alliance said: "Today we have heard the same tired old justifications brought forward for HS2 - all of which don't stand up to scrutiny.

"HS2 won't rebalance our economy - it will make London stronger. It creates few jobs for the costs involved and has an unacceptable environmental cost. The Government needs to show real leadership on HS2 and listen to the voices across the political and business spectrum which make clear it's time to think again."

Stop HS2 chairman Penny Gaines said: "The big question is not whether HS2 can be built to any arbitrary budget or by any specific date.

"The big question is whether HS2 is the right thing to build - and the evidence is that it is not. We call on the Conservative ministers to step back and look closely at HS2, and then cancel it."

Friends of the Earth's executive director, Andy Atkins, said: "A fuel duty price freeze may bring short-term relief to motorists, but the only long-term solution to rising petrol prices is to wean our transport system off increasingly expensive oil.

"If the Chancellor is concerned about living standards, he should be helping everyone to insulate their homes - bringing jobs and economic benefits to every part of the UK, and driving down emissions."

Jason Torrance, policy director for sustainable transport group Sustrans, said: "Cutting fuel duty until 2015 will cost the UK billions of pounds but investing this money in cycling, walking and public transport schemes would substantially boost the economy and at the same time allow more people to live active, healthy lives."

By Peter Woodman, Press Association