A planned 3p increase in fuel duty set for January has be scrapped today, the Chancellor George Osborne announced this afternoon as he delivered his Autumn Statement.
Instead a duty increase in August will go ahead, but has been reduced from 5p to 3p. The news will be welcomed by motorists and businesses everywhere, but is unlikely to appease environmentalists.
Delivering his speech, the Chancellor also revised down his forecast for the UK economy’s growth to 0.9 per cent from 1.7 per cent for 2011, and 0.7 per cent from 2.5 per cent for 2012, in recognition of continued sluggish performance.
Additionally, Osborne revealed that borrowing is to be higher than was forecast in the March Budget, with an extra £100bn needed over four years. As a result, the government expects that debt to GDP will peak at 78 per cent in 2014-5, before falling thereafter.
There is good news for public transport users too, as the Chancellor announced that rail fare rises, and rises for the London Underground and London buses, will be capped at 6.2 per cent-1 per cent above inflation-in January, down from 8.2 per cent.
There is also a £5bn new fund for infrastructure spend over the next three years, which includes £1bn for the rail network. While the go-ahead has been given for 35 road and rail projects across England. To help fund new infrastructure developments, the government also hopes to unlock a further £20bn from pension funds.
Environmental groups have been quick condemn the approval of new road building schemes, with Friends of the Earth calling the Government’s clean economy drive is ‘stuck in reverse’. Friends of the Earth’s Policy and Campaigns Director Craig Bennett said: "Osborne is right that we need to kick-start our economy – but cutting benefits for the poorest and syphoning off money earmarked for clean energy to fund road building and other polluting projects throws good money after bad.
"As crucial climate talks begin in South Africa, Ministers must show they are ready to wean the nation off expensive oil and gas – and stop threatening new, clean industries which will create new jobs and businesses for UK plc."
Commenting on the Autumn Statement, the Campaign for Better Transport’s Stephen Joseph said: "Despite some welcome announcements on rail, the Government has gone for some big dirty road projects which will add to dependence on imported oil supplies and simply move traffic jams a few miles.
“What’s really needed is tackling the backlog on local road maintenance and smaller transport projects that make best use of what we have but the Government has cut funding in those areas."
