A new report part-funded by the FTA and FairFuelUK suggests that lower petrol and diesel prices throughout 2015 have given the UK economy a “huge boost”.
The study, published this week by the Centre for Economic and Business Research (CEBR) confirms that low forecourt prices raised UK GDP (gross domestic product) by 0.6%, while also stimulating an extra £11.6 billion of economic activity and creating 121,000 jobs – thus also boosting government tax revenues.
The new research also confirms that the suspension of the government’s fuel duty escalator in recent years has increased tax revenues to the Exchequer by a net £1.3 billion. Had it still been in place, says the FTA, the extra cost to the economy would have been £4.9 billion.
The Association’s submission to the Chancellor ahead of his Autumn Statement, which was submitted earlier this month, calls for a 3p per litre reduction in fuel duty to ease cost pressures on domestic road freight, stimulate economic growth and create jobs.
“The Chancellor’s Autumn Statement will be the biggest test of George Osborne’s commitment to economic recovery for years,” says FTA deputy chief executive James Hookham.
“The link between fuel prices and growth was confirmed by the Treasury’s own modelling last year and now CEBR’s evidence shows just how big the gains were – and the economic folly of resorting to fuel duty or VED increases to balance the books or punish users of diesel fuel.”
Meanwhile, the RHA is also again calling on the Chancellor to cut fuel duty – as well as to fund an emergency programme of truck driver training.
Welcoming the CEBR report, RHA chief executive Richard Burnett (pictured) says: “If these important improvements [in the British economy] are to be maintained, it is crucial that the Chancellor announces a fuel duty cut in his Autumn Statement.”
And he continues: “If the UK haulage industry is to continue delivering daily life to every household, we [also] need to get an extra 45,000 to 50,000 drivers behind the wheel.
“To achieve this, the industry needs £150 million of government funding to be paid directly to UK hauliers to support an emergency programme of training... Moreover, we can clearly demonstrate that the Chancellor will be able to nearly double his investment.”
Burnett says emergency funding would be self-financing for HM Treasury.
“The new driving jobs would not only generate additional income tax and national insurance; the additional trucks could generate up to £275 million in fuel duty revenue,” he explains.
“In addition, the extra investment in UK skills would reduce the industry’s reliance on drivers from abroad, which the RHA estimates leads to approximately £180 million per annum being sent back to drivers’ home countries.
“This is money that would otherwise be spent in the UK, supporting employment and generating VAT.”
At 57.95 pence per litre, UK-registered hauliers pay by far the highest levels of diesel duty in the EU.
In Luxembourg, where many international transport firms draw fuel, the duty level is only 23 pence per litre. Even net of the one-off investment in training called for by the RHA, UK hauliers will still be paying by far the highest duty level in the EU.
FairFuelUK’s full report findings can be seen by clicking on the link below.