Initial findings from an independent report by the Centre for Economics and Business Research supports the Freight Transport Association’s assertion that cutting fuel duty would be good for business, promote economic growth, create jobs and have only a negligible impact on the Treasury’s fuel tax take.
The initial findings of the report, based on Office of National Statistics modelling, were presented to Treasury Minister Chloe Smith this afternoon by FTA and its partners in the Fair Fuel UK Campaign.
James Hookham, FTA’s MD of Policy and Communications, said:
“This report is proof positive that cutting fuel duty would be a ‘win win’ for business and the Government. A cut in fuel duty of 2.5 pence per litre would save truck operators £300 million a year – a welcome respite from serious commercial pressure – but more than this, it would create 180,000 jobs in the first year in the UK and increase our gross domestic product by 0.3 per cent.
“If the Chancellor went a step further and cut fuel duty by 5ppl it would create a further 30,000 jobs; the short-term hit to Treasury coffers would be relatively small beer in comparison with the stimulus it would provide the economy in the longer term.”
The CEBR’s key initial findings:
Cutting fuel duty by 2.5p per litre would –
- Create 180,000 jobs in the first year
- Represent no net tax loss
- Boost GDP by 0.33%
Cutting fuel duty by 5p per litre would –
- Create 210,000 jobs in the first year
- Cost the Exchequer c£1bn, a figure offset by intangible benefits of increased business and consumer confidence
“This evidence shows that the power to stimulate the economy, actually creating real growth and jobs, is well within the Chancellor’s gift. The parlous state of the UK economy demands bold and decisive action, we now know that being bold with fuel duty cuts supports the Government’s objective of stimulating growth. We urge him to extend the logic he used in last year’s Budget and cut fuel tax to bind the economy.”