{"id":3992,"date":"2012-11-13T20:39:43","date_gmt":"2012-11-13T20:39:43","guid":{"rendered":"http:\/\/www.vanrental.co.uk\/vanblog\/?p=3992"},"modified":"2018-02-26T13:50:46","modified_gmt":"2018-02-26T13:50:46","slug":"cutting-fuel-duty-would-boost-the-economy-raising-it-wont","status":"publish","type":"post","link":"https:\/\/www.vanrental.co.uk\/vanblog\/archives\/3992","title":{"rendered":"Cutting Fuel Duty Would Boost The Economy, Raising It Won’t"},"content":{"rendered":"

\"FuelIf the Chancellor wants to raise more money through taxes, he should be cutting fuel duty by 3p, not increasing it.<\/strong><\/p>\n

Chancellor George Osborne is getting ready to increase fuel duty by 3p per litre in January 2013\u00a0— an increase that has already been postponed twice, in January and August of this year.<\/del>\u00a0[UPDATE 05\/12\/2012: The 3p increase in fuel duty scheduled for January 2013 has now been cancelled. This was announced in the Chancellor’s Autumn Statement earlier today]<\/strong><\/p>\n

Yet even that 3p per litre is deceptive — once you add on VAT, which is charged on the price including fuel duty, the actual increase will be 3.62 pence per litre<\/strong>. That’s an extra \u00a32.90 per tank on a Ford Transit<\/a>. It soon mounts up.<\/p>\n

While I appreciate the environmental logic behind increasing fuel duty — people won’t use less fuel and cut pollution unless they are forced to — it is rather brutal and I very much doubt that Osborne is remotely bothered about the environment.<\/p>\n

Increasing fuel duty is simply a handy way to raise money to fill the Treasury’s empty coffers — or is it?<\/strong><\/p>\n

Counter-productive cuts<\/h3>\n

A new report<\/a> from the\u00a0National Institute for Economic and Social Research (NIESR<\/a>)\u00a0suggests that increasing fuel duty by 3p will ultimately result in the loss of 35,000 jobs and a 0.1% fall in GDP. The logic is simple — higher fuel prices mean that ordinary consumers like you and I have less spare money to spend on other things, so other businesses suffer.<\/p>\n

This argument works both ways, according to NIESR. If the Chancellor decided to cut\u00a0<\/strong> fuel duty by 3p instead of raising it, the economy would get a very significant boost. According to NIESR, cutting fuel duty by 3p would deliver the following benefits:<\/strong><\/p>\n