A headline-grabbing Budget? The automotive industry reacts

Much of the post-Budget dissection has centred on whether or not Ken Clarke fell asleep during the Chancellor's long speech (he needed the cups of strong black coffee Autoblog UK was using).

Was it just a headline-grabbing flash in the pan Budget, or will the Chancellor's proposals have a genuine long-term impact? The verdict has been mixed from motoring industry experts,

The price of petrol has risen 15 percent in the past 12 months and diesel by 20 percent – the clamour for action from the government has been almost deafening in recent months. The AA says that current fuel prices represent 59p of fuel duty and 22p of VAT.

Indeed, AA president Edmund King welcomed the scrapping of next week's fuel duty hike, saying that it would have been "the last straw for poorer drivers who spend a quarter of their household income on motoring."

He also described the 1p cut as a common sense move that would prevent a 'summer of discontent', but said it was just 'short-term first aid' and that fuel prices were still at the mercy of rising oil costs.

Debt management company Atlantic Financial Management said that a penny drop in fuel duty was not going to be enough: "The Chancellor's decision to axe the planned rise in fuel duty must also be welcomed but 1p is not going to make a huge difference to struggling families and small businesses. There is still some way to go before we can really say that fuel is an affordable commodity.

The chief economist of the Freight Transport Association, Simon Chapman, said that the reduction in fuel duty and postponement of the inflationary rise to January was crucial to keep food on UK shelves: "Our primary goal coming into this Budget was to see the fuel duty rise in April scrapped and for a fairer deal for our members and all road users in difficult trading conditions.

"Clearly, Mr Osborne has listened to our concerns and recognises that for economic growth to be sustained, then freight transport is needed to keep shop shelves filled and businesses supplied."

Road Haulage Association chief executive Geoff Dunning was even more direct and says the pain is not over yet for the haulage industry: "The fuel duty 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."

Short-term first aid indeed – of course the only thing to be done is lowering the price of oil, but as the Chancellor acknowledged himself in his Budget speech, that sort of thing is beyond the purview even of the government.

Read Full Story