FairFuelUK guest blog

Posted on: Tuesday, 18 March 2014 by Jackie Langridge in category FairFuel UK

By Howard Cox of the FairFuelUK Campaign

FairFuelUK has been campaigning over three years for the 32 million motorists of the UK, and in particular for the haulage industry, in part due to FTA’s consistent and steadfast financial backing.

As a founding backer of FairFuelUK, FTA has helped us to stop £30 billion in tax hikes for the road user in the life of this Parliament and something like £1 billion less for its haulier members. Imagine if Labour’s tax rises were in place, diesel would be at the dizzy heights of £1.70p per litre. It’s down to the FairFuelUK Campaign that we have some semblance of understanding in the Chancellor's office for the pain we feel every time we fill up ..... but don’t hold your breath.

The Treasury still takes too much in tax. Much too much!

The campaigning fight goes on into this year’s Budget, the May European elections and the general election in 2015. This Treasury cash cow of a tax impacts on the engine room of our economy, the UK haulage industry, with their predominant business cost ultimately affecting the level of all consumer product prices. MPs still don’t get it! The average UK motorist now pays more every year in fuel duty and VAT than for their gas and electricity bills - and that’s just the tax, not the fuel.

Mr Osborne has previously been receptive to our campaign; in his 2011 Budget by cutting fuel duty by 1p per litre, and then following this up by freezing it in the life of this Parliament. But does he want to hide the staggering fact that the UK still has the highest level of taxation on road users in the EU for diesel and the second highest for petrol? He currently takes considerably more at the pumps for diesel in tax than any other EU finance minister. Our call for a 3p duty cut would mean that the UK would drop to 18th in the EU 'tax take' for petrol and 9th for diesel. We have also shown that such a fuel duty cut would be self-financing and a vote winner. This punitive tax on UK road users has to be slashed!

We've repeatedly asked the Treasury to challenge our findings from the National Institute of Economic and Social Research that a 3p cut in duty would create 70,000 jobs and increase GDP by 0.2%, but they refuse to rebuff these figures. Paradoxically the HMRC actually said in 2011 that a fuel duty cut will help GDP. They said: “Fuel is a major business input for the UK economy. The reduction in duty will reduce costs for business; as such it is expected that this measure will have a positive impact on GDP.”

Why, when the Treasury openly admits that lower fuel costs reduce inflation and help growth, don't they cut duty? The bulging haversack of evidence is getting embarrassing.

Why is the government in such stubborn denial?

So far the nascent economic recovery has been bankrolled by consumers rather than industry, and having the highest fuel taxation in Europe will reduce any further flows of disposable income into the UK economy. Over 60% of consumers do essential food shopping by car and 50% use cars and vans to commute to work. Restricting both of these activities by high fuel taxation threatens future growth and causes misery to millions and businesses.

A 3p per litre duty cut for all vehicle fuels in the 2014 Budget isn't just prudent fiscal planning but should be an essential pillar of the government's strategy for economic regeneration. Any financial recovery begins through increased consumer spending. The Treasury must not ignore this essential fiscal truth.

I work full-time on this campaign and will do so until there is a fairer and more equitable way to tax the road user.

Your support is vital to the Campaign’s effectiveness in Westminster.

Leave a comment

Comments (0)

What do you think?

Sign in or register to comment on this page.