Cut in fuel duty urged as transport poverty hurts four in five homes

Four in every five households are living in “transport poverty” it is claimed today after motor trade leaders urged the Government to cut fuel duty to boost the economy and create jobs.

Figures published by the RAC Foundation claim most households are now spending more than 10 per cent of their disposable income on public and private transport, with most of the money going on buying and running a car.

The highest-earning households now spend 15.5 per cent of their disposable income on transport, while the lowest-earning households spend nine per cent.

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Today’s figures come after Government Ministers were told a reduction in fuel duty would create “many thousands” of jobs and get Britain’s economy moving again.

The FairFuelUK group led a delegation to meet with Treasury Minister Chloe Smith yesterday to present her with the initial findings of a report by the Centre for Economics and Business Research, which claims a cut of 2.5p per litre would create 180,000 jobs in the first year, at no net tax loss.

FairFuelUK said that a bolder 5p cut would cost the Exchequer around £1bn but create another 30,000 jobs.

National spokesman for FairFuelUK Quentin Willson said: “We’ve been saying this all along and now we can prove it. This conclusively backs up our claim that a cut in fuel duty will boost the economy without harming Treasury revenues. Quite rightly, the Chancellor’s priority is on stimulating growth in order to pay down the deficit. Here is a way to do both.”

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The tax burden in fuel costs for British motorists has also been laid bare in figures – obtained by Shipley MP Tory Philip Davies – which indicated that in Britain, taxes and duties account for 60 per cent of the price of petrol and 58 per cent for diesel.

Insiders predict, however, that George Osborne is unlikely to be moved by the fuel protests, even though, as the AA pointed out, today’s leap year extra day will bring in an additional £56.3m in fuel duty revenue.