Entrepreneur Country Reaction:
The announcement on the freeze in Air Passenger Duty is likely to have minimal impact on small businesses.
Extending the Air Passenger Duty to include flights by private jets seems a common-sense approach although largely symbolic. It is likely to add up to £170 per flight on the cost of a private flight.
Reaction From Entrepreneurs and Business:
Fuel duty and oil industry levy
What Was Announced:
- Introduction of fair fuel stabiliser to raise £2bn
- Fuel duty escalator cancelled
- Cutting fuel duty by 1p a litre
- Supplementary charge on profits from UK oil and gas production are to be increased from 20% to 32% raising an expected extra £2bn.
Entrepreneur Country Reaction:
Rarely has the phrase 'every penny counts' been more apt than following George Osbourne's surprise announcement of a 1p decrease in fuel duty- one that captured many of the news headlines.
George Osborne has also decided to defer a 5% increase (1p a litre plus the rate of inflation) in fuel duty which had been scheduled to come in next week.
In addition the fuel price escalator which was introduced in 1993 to raise revenues and discourage car use will be frozen for the rest of this parliament. In it's place The Chancellor announced a 'fair fuel stabiliser' when oil prices are high meaning fuel duty will follow inflation.
With UK fuel duty amongst the highest in Europe and petrol and diesel costs have hit record highs in recent months hitting an average of over 133p per litre, according to AA.
Whilst the announcement of the 1p cut stole headlines and will be seen by many businesses as a small step in the right direction, it is likely to be the decision to defer the April increase in fuel duty that will provide the real relief.
Reaction From Entrepreneurs and Business:
"As a nationwide business we appreciate the fuel cut. Some say this will make no difference at the pump but for me this is not the point as, ceteris paribus, the net gain to motorists is still 6p on the litre," Adam King of King & Allen
"We are pleased that the Chancellor has introduced a fuel duty stabilizer [and] has committed to cutting fuel duty... This will provide much needed stability for struggling small businesses." John Walker, National Chairman, Federation of Small Businesses
"The scrapping of the fuel escalator and the introduction of a fair fuel stabiliser is a step in the right direction for improving stability in the medium term. However the penny cut in fuel duty as opposed to the five pence rise that had previously been planned should help reduce inflation in the short term. This in turn will give the Bank of England a little more time before it has to raise interest rates." Azad Zangana, European Economist at Schroders
