The government’s planned 3ppl fuel duty rise scheduled for January will result in 35,000 job losses and reduce GDP growth by 0.1%, FairFuelUK (FFUK) told the Treasury today (29 October).
A detailed report produced for FFUK by the National Institute for Economic and Social Research (NIESR) reveals that as a result of these lost jobs and damage to growth, the planned fuel duty hike would only bring in half the expected extra tax revenue - £800m instead of £1.5bn.
However, the NIESR study shows that by cutting fuel duty 3ppl instead, around 70,000 new jobs would be created and GDP growth would be boosted by 0.2%.
“FFUK has always argued that fuel duty shouldn't be the Treasury's sacred cash cow - it should be used as a lever for growth,” said Quentin Willson, national spokesman for FFUK.
“We've proved our argument with robust financial research and modelling that shows if you raise duty, you destroy jobs and damage growth,” he said.
FFUK, along with its key backers the RHA and FTA, presented the findings to Treasury minister Danny Alexander and senior Treasury officials during a meeting this afternoon.
“Danny Alexander understands this critical point and is one of the few politicians who's actually listening to the facts and engaging with our argument.
"FFUK appreciates the government's aspiration to reduce the deficit but knows that hiking fuel duty up by 3p in January will only make things much worse,” added Willson.
