FDF: 2011 budget could fuel sector growth

By Ben Bouckley

- Last updated on GMT

Related tags: Petroleum

UK food hauliers have struggled with record fuel prices and freezing temperatures in recent months
UK food hauliers have struggled with record fuel prices and freezing temperatures in recent months
Food and Drink Federation (FDF) director general Melanie Leech has hailed the 2011 budget for positive announcements, such as a fuel duty cut, that she says could spur food and drink manufacturing growth.

Leech welcomed Chancellor George Osborne’s Commons announcement that a 5p per litre inflationary increase in fuel duty pencilled in for next week would be scrapped, with a 1p cut effective from six o'clock tonight: “Food manufacturing is heavily dependent on fuel and any increase imposes an enormous burden on our members,”​ she said.

“Earlier this month, together with partner organisations, we wrote to the Chancellor to express our concerns about the rising fuel cost situation, and we are pleased that an increase will not now happen.”

Road Haulier’s Association (RHA) chief executive Geoff Dunning also gave a “cautious welcome” ​to the fuel duty cut and fair fuel stabilizer (the latter is the means by which the government is funding the cut, by raising taxes on profits from North Sea oil drilling), where many association members include firms that transport foodstuffs by road.

Middle Eastern unrest

The RHA said current unrest in the Middle East meant rising oil prices on an almost daily basis, with every $3 (£1.84) on the barrel price meaning an extra 1p per/litre at the pump.

“Today’s cut will go some way to bringing relief to an industry that has quite literally been fighting for its survival. However, the inflation element has not been cancelled but simply postponed and we face two sharp increases in quick succession next year,” ​said the RHA.

The RHA said its weekly fuel survey showed that costs for a heavy goods vehicle have risen by £2,700 a year in just six weeks, on average. "We know that other costs are rising sharply but today’s cuts will bring some relief to hauliers and their customers.”

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