ISSUE DATE: 28 February 2021
Centre for Economics and Business Research (CEBR) Report highlights the economic damage from even a 2p rise in fuel duty.
ABD Spokesman Paul Biggs said: โDespite a 10-year freeze on fuel duty UK diesel taxes are the highest in any major economy and petrol taxes are amongst the highest. Itโs a concern that Chancellor of the Exchequer Rishi Sunak may be persuaded to raise fuel duty as a result of his 3rd March Budget despite the negative effects this will have on any post Covid-19 economic recovery. The ABD urges the Chancellor not to give in to โgreenโ virtue-signalling. A cut in fuel duty would make much more economic sense than a rise.
The key findings (1) of the Fair Fuel UK (FFUK) and RHA commissioned CEBR report (2) include:
โข Any rise in fuel duty would generate very little revenue.
โข A 2p rise in fuel duty would create economic damage, cutting GDP by about ยฃ600 million and reducing employment by about 8,000 jobs. It would add 0.6% to the CPI (inflation).
โข A rise in fuel duty would hit the poorest motorists most. Motorists in the poorest 10% of the population spend proportionately twice as much on fuel as the richer groups. A rise in fuel duty is regressive.
โข CEBR research has shown that the policy of freezing fuel duty, in place since 2011, has been highly successful, reducing the CPI by 6.7% compared with where it would have been and boosting household expenditure by ยฃ24 billion. With a policy that has proved successful, it would be bizarre to change it.
Notes for editors
(1) Summary of CEBR Report:
The Impact of Imposing an additional 2p on Fuel Duty
(2) Full CEBR Report
https://fairfueluk.co/CEBR-Fuel-Duty-Impact—Nov-2020/2/
(2) Full CEBR Report:
