Financial News
- 30 October 2012, 11:29
Fuel Duty Cut 'Would Create 70,000 Jobs'
Ministers are being urged to cut fuel duty in a bid to help revive the UK economy, ahead of the next planned rise in the tax.
Fuel duty is due to be raised by 3p a litre in January but a study by the National Institute for Economic and Social Research (NIESR) for the campaign group FairFuelUK argues it would be counterproductive.
The report found, by going ahead with the increase, up to 35,000 jobs could be lost and economic growth cut by 0.1% as firms and motorists absorbed the impact.
As a result of the job losses and damage to growth, the tax increase would only bring in just over half the expected extra tax revenue of £1.5bn, the study claimed.
The report suggests that by cutting fuel duty by 3p instead of raising it by 3p would create 70,000 new jobs and boost growth by 0.2%.
The report added the 6p relative difference between the two options would normally have been estimated to have lost the Treasury about £3bn but, because of the boost to the UK economy, that loss of revenue would be much less - at £1.8bn.
FairFuelUK will present the report when its leaders meet Treasury officials in London.
Speaking ahead of the meeting, FairFuelUK's national spokesman Quentin Willson said: "We have always argued that fuel duty shouldn't be the Treasury's sacred cash cow - it should be used as a lever for growth.
"And we've proved our argument with robust financial research and modelling that shows if you raise duty you destroy jobs and damage growth.
"We appreciate the Government's aspiration to reduce the deficit but know that hiking fuel duty up by 3p in January will only make things much worse."
A Treasury spokesman said: "It is right that the Treasury engages with FairFuelUK to discuss technical issues around the impact of the cost of fuel on the economy.
"What matters to motorists and businesses is that fuel is now 10p a litre lower than under the previous Government's plans. This Government has done more to support motorists and businesses than any other."
what do you think?
ken w
i bet the treasury spokesman gets free fuel or an allowance plus loads of expenses to cover any increases in taxation. THE WHOLE SYSTEM STINKS.
David Francis
Govt policy today - if it moves then tax it. If it don't move - see how you can make it move!
Windows Live User
What would be the .pa.y.e. on 70,000 jobs? And the extra production to Britain be worth to the coffers?
shirley sutton
Government dont think of that just a fast buck and buggar the consequences in the average persons pocket cos we don't count
stewgwyn
Any struggling business that could be saved by lowering the duty on fuel would be a long term benefit in terms of PAYE revenue and less pressure on the benefits agencies.
bjnk
quote from above. "What matters to motorists and businesses is that fuel is now 10p a litre lower than under the previous Government's plans. This Government has done more to support motorists and businesses than any other." Assumeing again are they, trying to put something into peoples minds, next thing they will put it up 9p and say its still cheaper than what the last government would have it. Where do we get these scammers from and why in blazes do we ever elect them run or should that be ruin our lives. Sign up to fairfuel.co.uk
stewgwyn
The duty on fuel keeps rising but they will never understand that you can't collect duty from bankrupt businesses. Abandon this short-sighted, greedy, ''quick fix'' mentality for the long term benefit of everyone !
leslie lee
had britain kept her own north sea oil for britain only ............ and process it here also , then this country would have saved 100,s of billions paying out to foreign lands ............... the same with the natural gas deposits .............. but let us not forget........... governments in britain ONLY SUBSIDISE FOREIGN LANDS AT THE EXPENSE OF ITS OWN CITIZENS ........!!
Adrian Wagstaff
I wouldn't be surprised if they've never taken any oil out of the ground, anywhere. I bet it's always been made in a laboratory somewhere. I bet it really only costs about 5p per litre.
neil
Zee Germans managed to make fuel from synthesised oil during WW2, but then you cant hold an entire population ransom on it, so it was abolished
blue side
10:04am on 29/10/2012
How come we can see the logic and have been arguing the point yet no politicians seem to be able to see it and I include politicians of ALL parties.
stewgwyn
10:45am on 30/10/2012
Sadly, blue side, logic seems to be a commodity reserved only for we ''plebs''. We think, they destroy.
neil
6:27pm on 30/10/2012
because we the ones who actually have to pay for things like fuel etc, it doesnt cost them anything, its just something that goes to the expense account, they dont know what its like to struggle to be able to afford to get to work, to only earn enough that you have to struggle just the same next week