THE CHANCELLOR’s decision to scrap August's planned 3p rise in fuel duty will improve the economy, North Yorkshire business have said.

Matthew Lamb, managing director of Potter Group Logistics, said the decision was good news for the economy and the right thing to do. He said: “Most transport companies will in one form or another pass on the increased cost of duty.

“While Government may see short term revenue gains, it’s a directly inflationary factor. Every penny on diesel ends up in higher food prices. And it makes it more expensive for people to be mobile in their jobs.”

Simon Williams, North Yorkshire regional chairman of the Federation of Small Businesses, who also runs Yorkshire Express Services Ltd, a same day courier business based in York, said that for small businesses, especially in rural North Yorkshire, a 3p rise was going to be a considerable blow. “We’re extremely happy he has postponed it and would like to see more of a stabilisation, rather than fluctuation that we currently have. We would like it to be equated to inflation, rather than constantly putting it up and down.” He said it was a shame however that the rise had only been postponed to the end of the year.

Susie Cawood, head of York and North Yorkshire Chamber, said the decision was excellent news. “The last thing that business needs is a tax rise when we’re in a recession.

“We will carry on trying to do something about the problems businesses face with the increase in costs. Fuel’s the biggest one. It affects everything.”

The Government said departmental savings across Whitehall had enabled it to freeze the tax for the rest of the year.

Anne McIntosh, MP for Thirsk, Malton and Filey, said: “This decision will have a positive impact on all those living in Thirsk, Malton and Filey, especially hard pressed families, pensioners and those living in deeply rural areas.

“The proposed increase has been postponed until January 1, 2013 allowing time for alternative sources of revenue to be considered.”