SMMT calls for fuel duty freeze

The Society of Motor Manufacturers and Traders (SMMT) has called on the UK government to freeze fuel duty to relieve immediate financial pressure on businesses, fleet operators, hauliers and motorists. According to the Society the duty rise planned for April this year threatens industry, businesses and consumer confidence at a crucial and fragile point in the UK's economic recovery.

The SMMT is calling for the government to reduce the stress on household budgets, taking a measured approach to duty rates and motoring taxes that ensures stability and confidence among businesses and consumers whilst protecting government revenue.

“Vehicle manufacturers spend millions of pounds each year to improve the fuel efficiency of their vehicles to deliver the best deal to motorists. We now need government to play its part in helping consumers and businesses by freezing fuel duty and providing stability and certainty on motoring taxes,” said Paul Everitt, SMMT chief executive. “Cars and commercial vehicle registrations recovered last year as confidence returned. This recovery is fragile so it is vital that government releases the financial pressure on motorists.”

Truck, bus and coach operators are particularly vulnerable to fuel price fluctuations with rises having the potential to eat away narrow margins. Through years of investment, research and development, truck manufacturers have worked to deliver increasingly cleaner, more fuel efficient vehicles. With a typical 40-tonne truck burning around a third less fuel than one made in the 1970s and a corresponding ‘per tonne transported’ figure of just one litre of diesel per 100 tonne/km, it is clear that investments made by vehicle manufactures into economic and low emission technologies are paying off for businesses as costs rise.

Registrations of new vans and trucks were hit extremely hard by recent tough economic conditions falling by 36 percent and 40 per cent for vans and trucks respectively in 2009 alone. A strong recovery in 2010 of 19.6 per cent for vans and a significant slowing of negative growth for trucks of 0.8 per cent demonstrates a recovery in business confidence.

However, this recovery is fragile and could easily be knocked off course by steep rises in duty, such as the increase set for April. In June 2010, SMMT urged government “not to raise taxes and duties on vehicles and fuels above the rates and horizons as set in budget 2010”, pushing the point that “a stable tax and duty regime” is vital.

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