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BUDGET '09: Industry comments on fuel duty rise

Date: 22 April 2009

John Lewis, chief, executive BVRLA:

"The government is happy to bail out the manufacturers and bankers who make vehicles and lend you the money to buy them, but it takes perverse pleasure in punishing anyone who actually wants to use one and help contribute to the UK economy.

"Coming just weeks after a previous 1.84p per litre rise in fuel duty, this announcement will increase the financial burden on millions of businesses for whom road transport is an essential tool, not a discretionary luxury."

David Brennan, managing director, Leaseplan:

"Being able to travel is a vital ingredient in keeping businesses going. The fuel duty rises announced today, along with the new Vehicle Excise Duty (VED) rates coming in next week, will be a disappointment to many businesses. Put together, these measures will make it even more difficult for businesses to stay on the move.

"Organisations in all sectors will need to continue to look seriously at their transport policies if they are to mitigate the impact of this move. Making sure you have the right mix between mileage reimbursement, pool cars, leased cars, daily rental and public transport could prove the difference between a company surviving and becoming another victim of the recession."

Professor Stephen Glaister, RAC Foundation:

"The Chancellor continues to unfairly burden motorists with extra taxes, Alistair Darling talks of fairness and opportunity, but his actions are completely at odds with his sentiments. And this immediate misery for motorists masks a more fundamental issue.

"The Chancellor's announcements only increase an already grossly disproportionate tax burden on drivers. Year in, year out, those with cars are seen as a soft touch. The Government knows the majority of journeys on the roads are not made out of choice, but because there is no alternative way of people getting from A to B, yet ministers continue to punish a captive market."

Neville Briggs, managing director, CFC Solutions:

"The 5% Company Car Taxation band shift, the increase in fuel duty and the rises in Vehicle Excise Duty are all continuations of existing Government policy and come as no surprise. The vast majority of fleets now have policies in place that are steering drivers towards cars that use less fuel and pump out less CO2, and these changes are designed through a combination of carrot and stick to incentivise their continuation."

Jim Salkend, Chairman, Toomey Opticar:

"These Fuel tax increases are actually quite modest when the general movement of oil price fluctuations are factored in, but will not benefit road users in my opinion. The revenue raised will be tipped into black holes other than those in the road surface."

Sue Robinson, director, Retail Motor Industry Federation:

"Yet again the government is set to hit the lower paid hardest with the fuel duty rise of two pence per litre in September and the reintroduction of the fuel duty escalator in 2010."

James Hookham, policy director, Freight Transport Association:

"The logistics sector is the lifeblood of the UK economy, and rather than the transfusion we need, Alistair Darling has turned Dracula. Insolvency in the logistics sector has doubled in the last year and the number of HGV drivers looking for work has almost quadrupled. What more evidence does the Government need that parts of the sector are on their knees?

"The logistics sector has a strong track record of reducing emissions and investing in greener vehicles. Ironically, the Chancellor's announcement today has put the kibosh on many businesses being able to make that investment. It may be unpopular to tax motorists, but the fact is that private cars add far more to the UK's CO2 emissions than commercial vehicles. That's why the time has come for the Government to give serous consideration to different rates of duty for business users and private motorists."

Stephen Dilley, FleetData UK:

"The additional 2p. on fuel from September will be seen as a step too far."

Alan Lunt, finance director, Lloyds TSB Autolease:

"This is the second increase in six months and although it's consistent with the green agenda of this Budget, it will have an inevitable impact on the cost of doing business. It also pays to remember that it is a 2p increase with VAT on top, which fleet managers should factor into their calculations.

Mark Sinclair, director, Alphabet:

"Despite increasing fuel duty by twice the rate of inflation, and doubling the rate of the escalator from next year, the Government still expects its revenues from fuel tax to fall below projections. Arguably, if it allowed motorists to enjoy more of the benefit from lower oil prices there would be more vehicle use, and therefore more economic activity, compared with its strategy of continually putting the squeeze on pump prices."

Jason Francis, managing director, Jaama:

"The Government's decision to increase fuel duty by 2p a litre in September - potentially at a time when the UK is heading out of recession - is a disappointing move.

"The pump price increase will impact on company and fleet budgets at a time when they can ill-afford the additional costs and will also trigger inflationary pressures."

Phil Moorhouse, managing director, Northgate Vehicle Hire:

"However, we are disappointed that the Chancellor has continued to pursue an agenda of fuel duty increases.

"September's promised 2p a litre rise on top of the 1 April 1.84p a litre increase at a time when all business costs are under tremendous pressure is in our view ill-advised.

"The Chancellor is adding costs at a time when businesses are finding it impossible to pass on that additional expense to their customers. Therefore, they will have to take the additional fuel costs on the chin and that will have a direct impact on profitability."

Ross Jackson, managing director, Fleet Operations:

"The Chancellor's decision to pursue an agenda of regular fuel duty increases - a 2p a litre rise is scheduled for 1 September meaning that duty will have increased almost 4p a litre this year - is another stealth tax at a time when fleets, company car and van drivers and private consumers can ill-afford the cost burden.