FairFuelUK CEBR Report - Low Fuel Prices Add £11.6 Billion to Economy
A groundbreaking report published this week by the Centre for Economic and Business Research confirms that the lower petrol and diesel prices of 2015 have raised UK GDP by 0.6%, created an extra £11.6 billion of economic activity, 121,000 jobs and boosted government tax revenues. The research also shows that raising duty on diesel or increasing VED on diesel vehicles would cost businesses and families £9.3 billion across the current Parliament.
The historic research, commissioned by FairFuelUK, shows that the low oil and fuel forecourt prices seen this year have increased business investment, lowered production costs and improved household spending across the UK economy.
Critically, the data also proves that the suspension of the government fuel duty escalator has increased tax revenues to the Exchequer by a net gain of £1.3 billion.
Had the fuel escalator been in place the extra burden to the economy would have been £4.9 billion.
FairFuelUK’s campaigner, Quentin Willson, says: ‘This landmark report completely destroys the myth that high fuel duty levels increases government tax receipts. We’ve proved that keeping duty low actually increases revenues into the Exchequer by improved economic activity, more income tax, NI, Corporation Tax and VAT. The government must now do everything in its power to lower fuel duty as well as making sure fuel retailers pass on oil price savings to businesses and consumers. Our future economic strength depends on this policy.”
The report also strikes a warning note to the Chancellor in the run up to next week’s Autumn Statement on diesel duty and VED. Any plans to increase tax levies on diesel usage as a reaction to the VW emissions scandal would cost the UK economy over £9 billion in extra taxation.
Howard Cox, co-founder of FairFuelUK says: ‘George Osborne should look at this data very carefully indeed. We’ve provided clear evidence-based proof that lower transport costs of 2015 have significantly benefitted everybody, including the Treasury and there’s now no argument left not to reduce fuel duty. Any plans he may have to penalise drivers for using diesel cars, vans and trucks will backfire badly and hit businesses and families with a shocking £9.3 million bill.”
Cebr Director, Oliver Hogan said: ‘While the continuation of the fuel duty escalator would have brought in additional indirect taxes over the past year, the Government would have been trading off the boost to economic activity and jobs for increased tax revenues. Given the fragility of the economic recovery, this would in hindsight have been an unwise policy.’
To read and download the CEBR Report Click Here