The difference between the previous Tory administration and the new one, couldn’t be more marked. We hope this fuel duty cut rumour is indeed to be delivered. Sajid Javid in his leadership campaign promised to continue a freeze in fuel duty. Cutting it will be an incredible boost to the UK’s economy and even more resultant growth tax income to the exchequer. It is total common sense and a vote winner.
Robert Halfon MP said:For nearly 10 years, with FairFuelUK, I’ve been campaigning to cut fuel duty. Everywhere you look, drivers are hit by taxes and demonised for having no choice but to use their vehicles.. The Prime Minister and the Chancellor’s, common sense support of the commercial heartbeat of the economy must be welcomed. It’s the right time the financial strain on the backs of hardworking motorists was alleviated.”
Howard Cox, founder of FairFuelUK said: “Remember the ‘just about managing’? Well at last they will see the benefit of Boris Johnson and Sajid Javid’s succession of new ‘in touch with reality’ policies. Such an inspired cut in duty we’ve been lobbying for since 2011, will add to the benefits of the last 8 years in the freeze in this regressive levy. It will help the world’s already highest taxed drivers to increase their consumer spending. It will reduce inflation, prices in the shop, increase tax revenue to the Treasury and massively support hard pressed hauliers during this time of Brexit upheaval. A true vote winner!”
Quentin Willson, motoring journalist, broadcaster and FairFuelUK campaigner said:‘I’m very encouraged to see that the PM and Chancellor understand that lowering fuel duty will stimulate the economy and create new spending activity vital in this time of uncertainty. Families and business all over the country will reap the benefits of this enlightened policy.’
Christopher Snelling, Policy Director at the Freight Transport Association said: “This would be excellent news and something FTA has been campaigning with FairFuelUK for years. A cut would massively stimulate the UK economy whilst mostly paying for itself as Government would get more tax from other sources as a result. Fuel duty is a blunt tax that does little for environmental purposes in haulage, as currently there is no alternative to diesel in the mass market and the goods still have to be delivered.”
Richard Burnett CEO of the Road Haulage Association said: “The RHA welcomes the news that the new Prime Minister has recognised the huge impact of fuel duty on the economy. After many years of tireless lobbying with FairFuelUK it would appear that the penny, quite literally, is beginning to drop. It is clear that the Prime Minister and the Chancellor are listening to us. For years UK hauliers have been operating at a disadvantage to our European counterparts. A cut in fuel duty will go some way to levelling the playing field with the rest of Europe. “This is vital to help stimulate the economy during these challenging times.”
Background to the impact of the Fuel Duty freeze – A cut will deliver even more positive effects on the economy.
In September 2018, the Chancellor of the Exchequer advocated that the 8 years fuel freeze has lost £46 billion to the Treasury. This Pinocchio retort from the protection of the despatch box by the Chancellor and other Treasury Ministers to espouse a view they are somehow, the wounded heroes of not putting an already punitive tax up, beggars belief. This claim is a downright lie!
The Chancellor’s own department published in 2014, that reductions in fuel duty will increase GDP by 0.5% and as such, more tax will be gleaned from increased company profits, wages and consumption. Yes, you got it, all adding to higher tax revenues! But staggeringly it now seems, that dynamic modelling forecast has become obsolete and inexplicably dismissed by the very Ministry experts that produced it!
The highly paid soothsayers at the Institute for Fiscal Studies think-tank estimates the 8 years freeze, which has been in place since 2010, costs the Treasury about £9bn a year. Sorry Mr. Paul Johnson you are totally wrong! We all know how erroneous your forecasts and predictions have been in recent years. Please read on to learn why, from CEBR analysis for FairFuelUK.
- Had the freeze in fuel duty since 2011 not occurred, Labour’s fuel duty escalator’s impact on CPI would have reached 6.7%. It is now 2.1%!
- Had Labour’s fuel duty escalator continued as planned from 2011 onwards, fuel duty today would be 83.33p per litre rather than 57.95p per litre, 43.8% higher.
- The CEBR estimates that this would translate in overall fuel prices being 24.0% higher, circa £1.65 to £1.70 per litre. Combining this with their statistical analysis between fuel prices and various general price indices, they find that this would translate into the following:
- 6.66% higher consumer prices
- 5.22% higher output producer prices
- 20.33% higher input producer prices
- 5.14% higher prices for road freight
- The yearly impact of higher inflation across all of this, would have eventually reached £14.5 billion per year, in funding all UK’s outstanding government debt. That’s over £116bn in cumulative debt funding costs over 8 years.
- The CEBR estimate that household expenditure is £24.2 billion higher per year due to fuel duty being frozen. This equates to approximately 1.21% of total GDP
