Cautious welcome for fuel duty freeze

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

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."

By Peter Woodman, Press Association Transport Correspondent