BPF gives warm reception to fuel duty freeze

The British Plastics Federation (BPF) has welcomed the government’s decision to freeze the proposed 3p-a-litre increase in fuel duty.

George Osborne, the Chancellor of the Exchequer, told the House of Commons yesterday that fuel duty, which was due to go up in August, would be frozen for the rest of the year.

BPF director-general Peter Davis said his organisation, together with six other plastics trade associations, had called for the increase to be cancelled.

“We are very glad about this decision,” said Davis. “Our companies should benefit in their transport costs from lower oil prices and had it gone ahead this tax increase would have reversed that [benefit].” 

“It’s a critical time for UK manufacturing and it’s important not to increase taxes on companies,” Davis added.

It is the second time a proposed increase has been postponed by the current Chancellor. In his autumn statement last year Osborne announced he would replace a 3p increase planned for January this year with a planned 5p increase scheduled to take effect in August 2012, cut to 3p.

Now this too has been postponed, with Osborne saying the one-off cost, estimated to be around £550m, being “fully paid for by the larger-than-forecast savings in departmental budgets”.

Shadow chancellor Ed Balls described the duty postponement as "the fastest U-turn in history".

But Osborne told MPs that the government was doing everything it could for families and business “in very, very difficult economic circumstances”.

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