Local businesses, as well as motorists, will welcome the Chancellors decision to continue the freeze on car fuel duty. Higher inflation and a downturn in high street spending have been significantly fuelled by high petrol prices, says The AA Motoring Trust.
However, with petrol prices still nearly 10 pence higher than they were at the beginning of the year and crude oil prices beginning to rise again, the Chancellor is enjoying an added VAT return of nearly two pence per litre.
"Motorists and businesses will continue to suffer from a big hole in their pockets from inflated car fuel costs. Each penny rise in the price of petrol takes 730,000 a day out of consumer spending and leaves a 26 gap in a typical two car-owning households annual budget ," says Paul Watters, head of transport policy for The AA Motoring Trust.
"We are concerned that the tax-free limit of 40 pence per mile for using their private cars on business has become inadequate for three million workers, who see fair compensation eroded while employers are protected from higher car fuel prices. The AA Trust wants to see the limit rise to 45 pence per mile, a margin similar to that agreed by the Inland Revenue Service in the USA on Friday."
