Chancellor to deliver Autumn Statement

The Chancellor George Osborne will deliver his Autumn Statement today (Wednesday, December 3) at 12.30pm.

He has already revealed plans to triple the level of spending on UK roads to £15 billion by the end of the decade.

The Transport Secretary Patrick McLoughlin and Chief Secretary to the Treasury Danny Alexander revealed the first ever Roads Investment Strategy on Monday (December 1).

It outlines plans for 1,300 new lane miles on motorways and trunk roads, in order to tackle congestion and fix some of the most notorious and longstanding problem areas on the UK road network.

Simon Dixon, transport partner at Deloitte, said: “The funding will help to provide security and confidence among those looking to invest in the UK road network.

“The extra investment and long-term certainty of funding will also enable the Highways Agency to put together cost-effective programmes, which drive down costs.”

However, fleets will be thinking about their costs today and keeping a keen eye on what the chancellor says about fuel duty today.

Fleets have been enjoying falling fuel prices but declining tax revenues at the Treasury are threatening to reverse that downward trend.

The price of oil has collapsed in recent months; suffering a 30% fall from its summer peak of $115 a barrel to below $80 today – a four-year low.

Mike Waters, senior manager insight, consultancy and CSR at Arval UK, explained that the recent fall in prices was a reflection of global demand, particularly from the US.

He said: “A growth in US fracking operations has increased their capability to generate fuel and made them more self-sufficient therefore reducing demand.  As market forces dictate, this fall in demand has had a knock on impact on prices in the UK.”

But the downward trend in oil prices also raises the spectre of a return for the fuel duty escalator, which allows fuel duty to increase by the level of inflation plus 1ppl. 

Three years ago the Chancellor George Osborne introduced a fuel stabiliser system instead of an escalator, as oil prices surged above $115 a barrel. However, he said the escalator could be re-introduced if prices fell below $75 a barrel.

Whether or not Osborne has the appetite to reintroduce the fuel duty escalator remains to be seen, but fleets can follow the Autumn Statement as it unfolds with Fleet News.