The FTA is responding to the IFS (Institute for Fiscal Studies) annual Green Budget Report, published on Monday (8 February 2016), which suggests that a continued fuel duty freeze would effectively cost the UK economy £3 billion per year.
FTA believes that nay measure to end the fuel duty freeze would hinder the still fragile economic recovery and further weaken confidence.
Indeed, FTA deputy chief executive James Hookham (pictured) argues that it is now time for further reductions in fuel duty to keep the economy growing.
“Regardless of the price of oil, for every penny fuel duty goes up it costs truck and van operators around a £100 million in a full year,” insists Hookham.
“It won’t make operators drive any less – goods still need to move to where they are needed. And it won’t help them invest in making their vehicles and drivers even more efficient... It will just cost them a lot of money,” he adds.
Hookham makes the point that freezing fuel duty at 2011 levels has meant FTA members reliant on trucks and vans have been spared the “economically stifling effects” of a tax on an essential commodity.
Instead, he says, operators have been left with cash in their trading accounts to spend on “hiring more staff or purchasing other goods”, all of which have served to drive the UK economy out of recession.
“All this additional spending has actually generated more income tax and VAT, so fuel duty freezes are never as costly as the headline figures suggest,” insists Hookham.
“The Treasury even published a paper in 2014 that proved this,” he adds.
And Quentin Willson, lead campaigner for FairFuelUK, agrees.
“The IFS report ignores all the economic stimuli created from the fuel duty freeze... Businesses have sold more and families have spent more because of lower transport costs.
“The Centre for Economics & Business Research calculates that the lower transport costs of 2015 raised GDP by 0.6%, created an extra £11.6 billion of spending and created 121,000 jobs.
“Faced with these facts there’s only a couple of depressing reasons why the IFS have come up with their contrary conclusion. They don’t understand how our road economy works and George Osborne is softening us up for a fuel duty hike in the budget.”