There’s a 70% chance of getting the 3ppl rise in fuel duty planned for January deferred, according to motoring journalist and FairFuelUK spokesman Quentin Willson.
Commenting after his meeting with Danny Alexander, chief secretary to the Treasury, Willson said FairFuelUK’s National Institute for Economic and Social Research was “accepted with enthusiasm”.
“Alexander is a politician with an economics background and rural constituency who clearly understands what high fuel costs do to remote communities and struggling businesses,” said Willson. “Unlike so many other MPs and Ministers he didn’t trot out the usual dreary stuff about appeasing ‘motoring groups’ or ‘concessions for car drivers’, but simply understood that raising duty means raising the prices of nearly everything we do and buy in the UK.
“He accepted our ground-breaking report from the National Institute for Economic and Social Research with enthusiasm, promising to give it an urgent priority and then put us in front of a panel of Treasury experts to field their questions on our methodology and modelling.
“Protest groups don’t usually get such hospitality, access or engagement. In fact I’d say FairFuelUK’s meeting was the closest any fuel duty campaign has ever got to Treasury decision makers. More significant still, nobody at any stage said that we’d got our sums wrong. We were all struck by the openness and genuine interest in our figures. I get the feeling that there’s a real acceptance that this government is beginning to understand that they need to look at fuel duty in a different way.”
FairFuelUK’s research findings suggest that a 2.5p reduction in fuel duty would result in the creation of 175,000 jobs within a year and 180,000 jobs within five years of such a reduction. Such a reduction, it estimates, would not result in any fiscal loss to the government, while GDP would receive a boost of 0.32% within a year and 0.34% within five years.
The research found that a more significant 5p reduction could generate an additional 200,000 jobs at a net annual cost to the Exchequer of around £1.2bn within a year, which would fall to £1bn per year within five years. The boost to GDP would be smaller in this scenario – 0.28% after a year and 0.30% after five years.