Budget 2010: Fuel duty up but transport improvements promised

THE Chancellor did his best to soften the blow of an increase in fuel duty but the planned 3p a litre rise will still go ahead in stages.

It will go up by 1p in April, with another 1p added in October and a final 1p in January.

Mr Darling said that by phasing in the increase, the economy would have time to recover, especially with his target of getting inflation back under 2%.

The Chancellor said he would be writing to the Bank of England governor Mervyn King impressing on him the importance of keeping inflation under control.

Many experts had thought a phased move was likely as such a big increase in a basic commodity so soon before the General Election would have been a major turn-off for voters.

The freight transport industry already struggling with rising costs is unlikely to be impressed.

The logistics industry is massively important to the West Midlands given its key geographic location at the heart of the country.

Katie Teasdale, head of policy to the Birmingham Chamber of Commerce, said: “Piecemeal taxation usually leads to frustration among businesses and this will be no different.

“Such an increase is likely to have serious implications for the costs of goods as transport charges are invariably passed on to the consumer.”

She said the Chancellor’s strategy of saying things would be better in the future was all very well but there was little in what he said to substantiate this.

Transport policy in general is likely to benefit from significant investment.

Mr Darling announced that he would be allocating £100m to improve the condition of Britain’s roads after the bad winter left them with a legacy of potholes.

In an attempt to ease crippling motorway congestion, a further £285m will be spend on hard shoulder strengthening work to the country’s motorway network to allow for four-lane running.

The programme is already well advanced in the West Midlands following a successful trial on the M42 in Warwickshire. Current work on the M6 is likely to be concluded in the early spring although the programme has been delayed due to the bad weather.

Mr Darling said the Government would also be doing all it could to support the development of rail infrastructure and made reference to the new High Speed Rail Link between London and Birmingham, which was announced earlier this month.

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