Measures to help car owners likely to frustrate cycle and green campaigners

Budget 2011: Fuel duty cut, extra cash for potholes

Chancellor of the Exchequer George Osborne began his Budget speech this afternoon with a glum portrait of the nation. Osborne cut his annual growth forecast for the next year from 2.1 per cent to 1.7 per cent and said that Britain needed to catch up with the world economy.

The Budget contained elements designed to help businesses, including a bigger drop in corporation tax than expected, and an extended rate relief holiday for small businesses (see below).

National Insurance and Income Tax may be merging, the Chancellor confirmed, in the name of simplification, rather than increasing taxes, though the process is expected to take years, he warned.

Cycle and ‘green’ advocates are likely to be frustrated, however, by the news that fuel duty will be cut by 1p per litre from 6pm tonight, and that future rises have been shelved. Oil companies will be called on to pay for a new fuel stabiliser to help car owners.

Prior to the Budget, Sustran’s Jason Torrance said: "Significant investment into alternatives to car travel would help millions of people currently penalised by high fuel costs. Rather than short-term measures to temporarily reduce the cost of fuel we need a long term strategy to make our transport system more efficient, help our economy recover from the effects of congestion, pollution and, ultimately, wean us off oil.”

Osborne did have some good news for bikers with a pledge of an extra £100 million for local councils to fill in pot holes. AA president Edmund King tweeted on the news: "Extra £100m for potholes welcome, but drop in the ocean."

Key points from the Budget include:
-R&D tax credit for small companies to rise to 200 per cent this year.
-Rate relief holiday for small businesses to be extended by a year until October 2012.
-Corporation tax being reduced faster than expect – by two per cent rather than one per cent from April.
-An extra £100m will be dedicated to help local councils repair potholes.
-Fuel duty increase of 1p above inflation to be scrapped.

There’s more detailed Budget 2011 analysis here.

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