Industry lobbies government over fuel duty

London:  Fuel price lobby group, FairFuelUK, met with the chief secretary to the Treasury, Danny Alexander MP, on Monday to discuss the impact of fuel duty on the economy.

The talks at HM Treasury were held to present the findings of studies carried out by the National Institute of Economic and Social Research.  Monday’s meeting took place ahead of the government’s planned 3p per litre fuel duty rise scheduled for 1 January.

Analysis by FairFuelUK on the impact of fuel duty on UK growth and the economy formed the centrepiece of the discussions. Further meetings are expected in the next few weeks.

FairFuelUK was created by road hauliers and motoring organisations as a result of spiralling fuel costs.

Quentin Willson, national spokesman for FairFuelUK said before the talks; “This is an enormously positive gesture from The Treasury for FairFuelUK to present their ground-breaking research on the impact raising fuel duty has on the UK economy. The fact that Treasury figures are interested and listening sends an important message to all the business and families out there deeply anxious about the forthcoming 3p rise in January. This sort of open-minded engagement is exactly what this country needs to see.”

James Hookham, managing director – communications and policy at the Freight Transport Association (FTA) says:  “FTA believes that the reductions in fuel duty are the key to un-locking economic grown and we are determined to enlighten the Treasury as to how that can be done.”

Geoff Dunning, chief executive of the Road Haulage Association (RHA), which backs the campaign, says: “We left the Treasury team in no doubt as to the plight of both the motorist and the haulier and it is now vital that we see a stop to an increase in January.”

“We made our case clearly, and honestly. To have the additional backing of a professional report that presents a firm and positive case to address fuel duty as a matter of extreme urgency strengthens our case for action,: Dunning says.

The results of the recent study include the identification of the impact of fuel duty on UK growth and the economy, and follows earlier research which was carried out by the Centre of Economic and Business Research.
“It is important that the Treasury understands the reasoning behind the reports both the FTA & RHA have commissioned, and takes the opportunity to act upon them in the autumn statement,” Hookham says.

The report says that a 3ppl duty rise in January will

  • Cut 35,000 jobs
  • Cut growth by 0.1%
  • Will improve the fiscal deficit by only £880M (40% less tax revenue that Government predictions and is in stark contrast to forecasts that every 1ppl duty increase would raise £500M.
  • Every household will feel an even great strain on their finances
  • The Bank of England could be forced to raise interest rates earlier than currently expected.

If the report’s recommendastion are applied and fuel duty cut of 3ppl applied it would:

  • Create 70,00 jobs
  • Boost the economy by 0.2% – essential at a time when financial growth is so critical
  • Reduce the fiscal position by £1800M – significantly less that the £3b the Treasury would expect.


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