Treasury minister Danny Alexander has pledged to review FairFuelUK’s (FFUK) economic report, which shows that the planned 3ppl duty rise in January will result in 35,000 job losses and reduce GDP growth by 0.1%.
During a landmark meeting yesterday (29 October) with FFUK and its major backers the FTA and RHA, the chief secretary to the Treasury made a firm commitment to look closely at the Impact of fuel duty on the macro-economy report, produced by the National Institute for Economic and Social Research (NIESR).
“We had 15 minutes with the minister; he set out his genuine desire to look at the report and emphasised that he and his team are interested in engaging and talking with us,” said FFUK founder Peter Carroll.
“We then had a full hour with three senior Treasury officials who asked lots of probing questions about the basis of the economic modelling in our report, and why we were so convinced that fuel duty was a lever for growth,” added Carroll.
The NIESR research also reveals that the planned fuel duty hike would only bring in half the expected extra tax revenue for the government – £800m instead of £1.5bn.
Cut duty, create jobs
However, if the government were to cut fuel duty by 3ppl instead, the research shows around 70,000 new jobs would be created, and GDP would be boosted by 0.2%
James Hookham, FTA MD of communications and policy, said: “FTA believes that a reduction in fuel duty is key to unlocking economic growth and yesterday we were able to enlighten the Treasury as to how that can be done.
“We have delivered a high quality report that turns the cause and effect of why people react the way they do to a fuel duty rise into hard and fast numbers. The minister and his team now need to go away and study the report, but it is going to be a tough job to dispute the findings.”
“The minister listened carefully to what we had to say,” said RHA chief executive Geoff Dunning. “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.”
To download the NIESR report, go to the FairFuelUK website.
