The Freight Transport Association welcomed the Treasury's statement that the government will not impose the planned increase of two pence per litre on fuel duty scheduled for September 1, 2004.

Last week FTA chief executive Richard Turner wrote to the Chancellor asking him to abandon the planned increase before Parliament went into summer recess. Clearly the ongoing uncertainty regarding the rising price of crude and its likely ramifications for the UK economy, pressed the need for an early decision.

Turner said: 'I am delighted that the government has made this pragmatic decision and has not risked the situation festering over the summer. The Treasury has clearly responded to well argued reason from industry, and have avoided the quite unnecessary disruption threatened by some elements of the road haulage industry.

'The last thing that the UK economy needs this summer is interruptions to the supply chain. This helpful announcement should ensure that no such interruptions take place.'

Fuel represents some 30 per cent of the operating costs of trucks and any increase in such costs has a penal effect on UK industry.