Osborne cuts fuel duty by penny
March 23rd 2011 The logistics industry received a boost today with fuel duty reduced and the fuel duty escalator scrapped in favour of a fair fuel stabiliser. The measures were announced by Chancellor George Osborne in the Budget.
Osborne cut fuel duty by 1p, effective 6pm tonight, and delayed the next two proposed rises in fuel duty. The April 2011 inflation-only increase will be delayed to January 2012. The April 2012 increase will be delayed to August 2012.
The move will cost the Treasury around £600m in lost taxes and will be funded through a £2bn tax raid on North Sea oil producers.
The fair fuel stabiliser increases tax on North Sea oil production when oil prices are high. The Government will increase the Supplementary Charge on oil and gas production to 32 per cent from tomorrow.
However, in years when the oil price falls below a set trigger price on a sustained basis, the Government will increase fuel duty by RPI plus 1 penny per litre. The Government believes that a trigger price of $75 per barrel would be appropriate.
The Chancellor said: “The rise in fuel prices has hit businesses hard, especially small businesses. And it is important that when shocks like the steep rise in the oil price occur, a responsible government is able to listen and respond.
“As well as stopping fuel duty rises I am today cutting fuel duty by 1 penny per litre. The fuel duty escalator will be cancelled – not just for this year, or next year – but for the rest of this Parliament.
“But I don’t want important investment in the North Sea lost. So if the oil price sustains a fall below $75, and we will consult on the precise figure, we will reintroduce the escalator and reduce the new oil tax in proportion.
“That is how it will work. No escalator when the oil price is high. No extra tax on the profits of North Sea oil companies if the oil price falls and stays low.”
Wincanton md Gordon Scott welcomed Osborne’s duty cut and called for the Chancellor to alleviate rising costs further by allowing industry to use longer trucks on UK roads.
“The take up of these vehicles by the industry could result in fuel savings of £1.8 billion annually. These savings are poised to come at a crucial time, as the industry searches for a solution to mitigate against rising costs,” he said.
Corporation tax
In a business friendly budget, Osborne also revealed that corporation tax would decrease by a further 1 per cent. From April 2011, the rate will be reduced to 26 per cent and, by 2014, it will be reduced to 23 per cent.
In terms of training, the Chancellor announced an additional 80,000 work experience places for young people, ensuring up to 100,000 places will be available over the next two years.
The Government will also fund up to 50,000 additional apprenticeship places over the next four years; and expand the University Technical Colleges programme to establish at least 24 new colleges.
The Chancellor also confirmed the £100m set aside to tackle pothole repair. More articles from Handling & Storage Solutions: | 
