Chancellor urged to slash fuel costs to boost economy

The Chancellor is being urged to cut duty and tax on fuel to help boost the UK's economy.

By The Newsroom
Tuesday, 23rd August 2016, 12:47 pm
Updated Tuesday, 23rd August 2016, 1:49 pm

Fuel pricing campaign group FairFuelUK has written to Philip Hammond urging him to use his first Autumn Statement to cut costs and bring the UK more in line with other developed countries.

Calling on Mr Hammond to “be bolder” than his predecessor, the letter asks him to cut duty on all fuels by 3p and to cut VAT on fuel to 15 per cent.

The group argues that lower oil prices are failing to do enough to help the economy, pointing out that a high proportion of fuel costs in the UK are made up of VAT and fuel duty, and arguing tha this puts UK businesses at a disadvantage to European rivals.

The letter says: “Our supporters worry that even fragile economies like Greece enjoy lower duty on diesel, and in Greece’s case it’s also 30p less than they pay on petrol. German and Polish diesel drivers respectively, pay 20p and 30p less than UK diesel at the pumps.

“All countries have access to the same petroleum prices of international markets but impose different tax regimes. As a result, the retail price of fuel is very different and in the case of the UK,

we consistently pay more tax than most of the developed world nations.

“Lower oil prices have undeniably helped in the last 12 months, but we’re now at a stage where lower oil prices can’t be translated into significantly reduced pump prices because of the circa total 70 per cent duty and VAT elements.”

It adds: “Cutting VAT on fuel to 15 per cent, as alluded to in the Brexit campaign, will help all motorists and small unregistered VAT businesses, who represent the engine room of our economy.”

The group is also calling for the creation of a fuel price monitoring body to cut the “lottery” faced by drivers at the pumps.

It says fuel retailers are not passing on savings in wholesale oil costs to customers and wants a monitor to investigate the “murky pump pricing processes” to create a fairer and more transparent market for drivers.

Howard Cox, founder of FairFuelUK said: “It’s now time for the new Treasury administration to practice what they endorse.

“Back in 2014 they said, lower fuel duty benefits the economy by boosting GDP.

“Such a widely popular cut in duty and VAT will also resonate profoundly with those families the Prime Minister addressed directly on the day she took office. Those families she said, that are: ‘just managing’, ‘working around the clock’, ‘doing their best’ and where ‘life can be a struggle.

“It’s time for the Government to truly deliver on the PM’s laudable intentions and help millions of hard working families, small businesses and the haulage industry to prosper. By doing so, the UK Economy will thrive after Brexit.”