Budget Result on Fuel as Government Does Its ‘Duty’

NFU Scotland and other organisations’ concerted efforts to encourage the UK Government to scrap the planned fuel duty increase and introduce a fair fuel stabiliser have paid off and should help to ease the financial stranglehold around the necks of many farming businesses and rural communities.

For several years, NFU Scotland has been lobbying the Government to cut fuel duty (on petrol, diesel, red diesel, gas and heating oil), introduce a fuel duty stabiliser and establish a rural fuel duty rebate scheme.  NFUS has held several meetings with Treasury ministers and officials as well as MPs and MSPs in recent months, including two face to face meetings at the Treasury since the coalition government was formed, to impress these points upon them.

Alongside today’s fuel duty discount and fuel stabiliser announcements, the UK Government also published that it has formally submitted a derogation request to the EU Commission to conduct a rural fuel duty rebate pilot scheme, which NFUS believes could eventually provide further help to those living and working in remote, rural areas.

Other measures announced today - including a freeze on vehicle tax for heavy goods vehicles, an increase in the personal tax allowance, support for apprenticeships, the early introduction of a green investment bank with increased funding and the doubling of entrepreneurs’ relief - should also help a range of businesses.

NFU Scotland’s President, Nigel Miller said:

“Today’s Budget announcement is a real result for farming and the rural community and will see many people breathe a sigh of relief when they realise that the much feared, imminent price rise in fuel, will not actually take place.  If the fuel duty escalator, which was abolished today, had followed its intended trajectory, fuel at the pump would have risen by around 5ppl. Instead, under the Government’s new stabiliser, fuel prices will be cut by a penny a litre from this evening.

“NFU Scotland has played a very definite role in bringing this about.  We wrote jointly with the Road Haulage Association to the Chancellor just last week about the proposed duty rise, duty stabiliser and remote area duty regulator, and this was just the latest petition, following a series of meetings with politicians and Treasury officials.

“This was quite a change in tone from last summer’s meetings, when any measures we proposed which could cost the Government or were not revenue generating, were rejected altogether in our meetings with Treasury.  Today’s announcement shows the kind of result you can get if you have a good idea and are a little persistent!

“It is important to emphasise, however, that farmers still require a fairer return from the marketplace.  We welcome the UK Government’s action on fuel price, but we now really need them to sort the other side of the equation and introduce the long-promised adjudicator to enforce the Grocery Supply Code of Practice.  Only then will we be well on the road to ensuring that, regardless of input costs, producers reliably receive a price for their produce which actually reflects the cost of production.”


Chancellor, George Osborne has today announced the following:

  • A 1ppl cut in fuel duty from 6pm today (Wednesday 23 March 2011).
  • The fuel duty escalator will be abolished and replaced with a fair fuel stabiliser.
  • The 2011-12 inflation-only increase in fuel duty will be deferred to 1 January 2012 and the 2012-13 increase will be implemented on 2 August 2012.
  • The UK Government has formally submitted a derogation request to the European Commission for a rural duty rebate pilot scheme.


Contact Sarah Anderson on 0131 472 4108



Date Published:

News Article No.: 54/11

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