Businesses welcome fuel U-turn

Price freeze welcomed
Price freeze welcomed

WIGAN businesses have signalled their relief after Chancellor George Osborne announced he will freeze fuel duty for the rest of the year, deferring a 3p hike which was due in August.

The move, worth £500m to motorists, would be paid for by departmental savings across Whitehall, the Treasury said.

Mr Osborne said: “We are on the side of working families and businesses and this will fuel our recovery at this very difficult economic time for the world.”

The announcement came hours after Shadow Chancellor Ed Balls urged the government to use a £500m underspend from the Olympics to fund scrapping the increase, which will now be applied in January, 2013.

Denis Wormwell, chief executive of Wigan-based hotel and holiday operator Shearings Group, concurred: “This is a positive move by the Chancellor.

“Fuel is a major input cost in our coach holiday business, so any measures that help reduce inflation will enable us to preserve low prices for customers.

“This is particularly important given the financial pressures that a lot of households are under, which continues to harm consumer confidence.”

Christian Spence, research manager at Greater Manchester Chamber of Commerce, said: “This will bring an additional level of certainty to many businesses as they plan ahead at a time when margins are under constant pressure.

“Global oil prices are currently easing and we’re seeing small reductions in the price of fuel at the pumps, but it is good that the government seem keen to lift at least some pressure from both businesses and consumers.”

Mr Osborne started to dismantle the formula in the 2011 budget when he abolished the increase over one per cent over RPI and cut fuel duty by 1p. He then deferred the April 2011 increase to January 2012.

In his autumn statement last November, Osborne cancelled the increase due in January 2012 and deferred the April 2012 increase to August. That has now been delayed until January

Phil McCabe, senior policy adviser at the Forum of Private Business, said: “This is probably the best news that business owners have had all year.

“Lets hope that it is the start of a growth platform with policies to help firms recruit and grow, including tax incentives.”