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Fuel duty rise will damage growth
Wednesday October 31st 2012
The Government's proposed 3p-a-litre rise in fuel duty will only bring in just over half the expected extra tax revenue due to the job losses and damage to growth it would create, said a report prepared for the FairFuelUK group.
Campaigners claim the rise, which is planned to take effect from January, could lead to 35,000 job cuts and a 0.1% decline in economic growth.
As a result, the report said that income from tax would be £800 million rather than the projected £1.5 billion.
Instead of raising fuel duty by 3p, the National Institute for Economic and Social Research, responsible for preparing the report, claim cutting it by the same amount instead would create 70,000 new jobs and boost growth by 0.2%.
The 6p relative difference between the two options would normally have been estimated to have lost the Treasury about £3 billion, but because of the boost to the UK economy, that loss of revenue is much less - at £1.8 billion, added the report.
FairFuelUK is due to present the report when its leaders meet Treasury officials in London.
Copyright Press Association 2012
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