Quentin Willson says that high fuel duty is currently a 'corrosive tax'.
This is a plea, an entreaty, a cri de coeur. And it comes from the millions of struggling families and businesses across the UK. The unaffordable level of fuel duty in this country is causing widespread misery, holding back growth and as a tax that restricts the movement of goods and people on our roads, is deeply counterproductive. Every shred of research says the same thing. Consumers are spending and travelling less, disposable income is down, economic activity is reduced and we’re buying less petrol and diesel than ever before. And that’s simply because fuel the most expensive its ever been in the history of road transport.
And it’s deeply mischievous to try and marginalise this issue by talking about ‘motorists’ and ‘car lobby groups’. High fuel costs effect every single person in the UK whether they drive or not. Virtually everything we buy travels by road and any increase in fuel costs is always passed onto to the supermarket shelves and paid for by the embattled consumer. And here’s the thing; according to the CEBR, the debilitating effect of high road fuel costs in a recession is twice what it would be in a stable economy.
The financial modeling of the economic cost of high fuel duty in a recession really hasn’t been done before. I should know because FairFuelUK has been to the Treasury and provided august academic research to prove our case. Money spent on high levels of fuel duty isn’t spent in the wider economy. We simply don’t know yet how badly Growth and GDP are being damaged by the climbing costs of road transport, but the chilling evidence is mounting. Even the OBR agree that a 10% rise in fuel costs could reduce growth by as much as 1%, and in a time of almost flat GDP, that’s a terrifyingly enormous figure.
The weakness of sterling and oil market speculation means that the price of crude will continue to climb, so the only relief is to cut duty now. Postponing the September increase isn’t enough and it’s a rise that shouldn’t happen anyway. The UK economy needs an immediate reduction in transport costs to get us through the rest of 2013. And let’s not forget all those disadvantaged groups like pensioners and those on low incomes who struggle to cope with funding their basic mobility. Fuel duty is a deeply divisive social tax that hurts the poorest in society and restricts the freedom of individual movement.
I’m not holding my breath for a duty cut in tomorrow’s budget, but I hope the Government will start to understand that high fuel duty is a corrosive tax that imperils our economic and social wellbeing. These are unprecedented times that require unprecedented action. A significant cut in fuel duty is essential.