Budget 2010: Rise in fuel duty to be phased in

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.

Alistair 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.

Terry Jones, of BDO, said: “The fuel duty increase of 3% announced previously is now being phased in with a 1% increase in April, October and next January. It is welcome for industry but it will cost the Government £550m to implement.”

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.

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.