In May 2014 FairFuelUK’s efforts were vindicated when The Treasury publically agreed that lower Fuel Duty does indeed help the wider economy and admitted that the 1p cut in 2011 and subsequent suspension of 14p of escalators in the lifetime of this Parliament will actually have improved UK GDP by 0.5%. This is The Treasury’s own figure and entirely due to not introducing those planned Fuel Duty rises. This admission has marked an historic step change in fuel taxation theory and highlighted the damaging economic effect of high transport costs on GDP and growth. With the reverse Fuel Duty model, now proven beyond any doubt, FairFuelUK thinks we need to look at Fuel Duty taxation in a completely different way. This change in attitude would not have taken place if it were not for the RHA's funding of the FairFuelUK NIESR report in 2013 and the FTA's Funding of the CEBR report in the same year. Both reports clearly showed that cutting fuel duty is good for growth
Our backing from 150 cross-party MPs, supporters like the FTA, RHA, RAC, APN, UKLPG and Aldermore Bank, not to mention our fabulous 750,000 members of the public who signed our petition, all know that it wasn’t the government who suddenly created this historic change in fuel taxation thinking - it was because of FairFuelUK and its founding backers the FTA and RHA. Years of our well-mannered, reasoned, intelligent, evidence based lobbying - often face-to-face with ministers - achieved the Big Change.
So as well as the Treasury stopping trying to marginalise 32 million licence holders by calling them Motorists, they should start thinking about them as Driving Consumers, and hopefully then they’ll realise this one very critical point. If those Driving Consumers - 70% of registered voters don’t forget - can’t afford to put fuel in their tanks (because more than 60% of that cost goes to the government in taxation), then consumer disposable income reduces drastically, GDP falls, inflation and unemployment rises and growth across most economic sectors slows down.
High transport costs significantly reduce economic activity – it’s as simple as that. The Freight industry has been telling the government this immutable truth for years – the problem was they didn't want to listen.
We launch our FairFuelUK Manifesto (see photo above) this week in Parliament on October 22nd. Please watch this space.
Howard Cox - Founder of FairFuelUK