Here is conclusive proof that a cut in fuel duty is a benefit to the UK Economy


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Fuel Duty levels and their impact on Economic Growth


Following on from FairFuelUK’s Fuel Duty report carried out by the CEBR in March 2012 and financed by the FTA one of their major backers, FairFuelUK commissioned further research to ascertain the impact of Fuel Duty on the UK’s Macro-Economy. The latest research was carried out by the highly respected National Institute of Economic and Social Research and financed by the RHA, another of FairFuelUK’s key major supporters. Here are crucial summary results from this ground breaking study.


A.  The Impact of Raising Fuel Duty by 3p

The planned rise in fuel duty of 3p per litre that is scheduled to come into force in January 2013 will impact as follows:


  • Destroy 35,000 jobs
  • Cut growth by 0.1%
  • A 3p Fuel Duty rise will only improve the fiscal deficit by about £880M. This means 40% less tax revenue than Government predictions and is in stark contrast to their forecasts that each 1p fuel duty increase would bring in £500M
  • Households will find their finances strained. Consumer spending will be about 0.1 per cent lower next year than would be expected if the fuel duty were left at its current rate. This is the dominant factor behind the expected loss of GDP, which is estimated to amount to approaching £1 billion (in 2009 prices) in 2013
  • The resultant rise in inflation could induce the Bank of England to raise interest rates earlier than currently anticipated. The negative impact on consumers and GDP overall would be expected to be approximately doubled, and this policy could lead to job losses in excess of 50,000

B.   The Impact of Cutting Fuel Duty by 3p

If instead of raising fuel duty the government were to introduce a 3p cut in this tax – in line with policies under action and discussion in France and the USA - the relative impact is as follows:


  • Net increase of 70,000 jobs
  • Growth boosted by 0.2%
  • Overall reduction in fiscal position would be £1800M or less than 0.2 per cent of GDP.
  • Significantly less than the £3Billion that the Treasury would expect (6p times £500M)

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To see similar results from the Centre for Economics and Business Research. Click on this link

CEBR Report

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The FairFuelUK Campaign won the Chartered institute for Public Relations Public Affairs Excellence Award 2012 - Managed by Peter Carroll Associates email: campaign@fairfueluk.com
Peter Carroll (founder) 07866 800755, Lynne Beaumont (co-founder) 07885 940945 , Howard Cox (co-founder & communications) 07515 421611

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