Fuel duty

8p fuel duty rise will force one in five to cut back on food shopping

28 November 2011

8p fuel duty rise will force one in five to cut back on food shopping

8p fuel duty rise will force one in five to cut back on food shopping

Two fuel duty rises next year, with VAT adding 8p to petrol and diesel pump prices, will force 18% of AA members to cut back on grocery shopping, AA research reveals. That rises to 23% among women.

Retailers will be further hit by the 23% who will abandon or delay spending on household goods, home improvements and luxury items. That rises to more than a third among those aged 18 to 34 years, the group looking to set up home and start families.

The hardest hit will be young drivers aged 18 to 24, with 28% cutting back on groceries and 36% who will ditch plans to buy furniture, home entertainment and other household goods in the near future.

AA members in Wales look set to suffer most with 22% cutting back on groceries and 27% on household and luxury goods. They are followed closely by drivers in the East Midlands, respectively 21% and 25%.

Overall, only 20% of AA members would be unaffected by the duty increases – 24% among top managers and professionals but falling to 15% among skilled and unskilled manual and service workers.

Almost two-thirds of the survey panel say they will cut back on car use if the fuel duty rises go ahead next year, rising to 68%-69% among unskilled workers and pensioners. More significantly, 6% of AA members said they would have to sell or take a car off the road, rising to 8% among unskilled workers, pensioners and drivers in Northern Ireland.

One in five of the UK sample said they would have to downsize a car, while 6% will forgo their cars and switch to two wheels, particularly among unskilled workers (10%).

The survey panel was asked:

With a planned duty increase in January and a further increase likely after the March 2012 budget, if petrol prices reached 145p a litre and 150p for diesel, which of the following would apply to you?

  • Sell or take off the road – 6%
  • Downsize one or more cars – 10%
  • Switch to a motorcycle, scooter or cycle – 6%
  • Cut back on car use – 63%
  • Cut back on normal grocery shopping – 18%
  • Abandon or delay purchase of furniture, luxury items or home improvements – 23%
  • Change job to reduce mileage – 4%
  • Abandon job because travel costs are unaffordable – 3%
  • Use public transport more – 22%
  • Car share – 6%
  • None of the above – 20%

Comment

“Fuel duty contributes more than 5% to the total UK tax-take, including council tax and income tax. Governments tell us to drive less when they need us to drive more.  So who really is car dependent? This survey shows that, if fuel duty increases go ahead next year, it will hit those who can least afford it,” says Edmund King, the AA’s president.

This survey shows that, if fuel duty increases go ahead next year, it will hit those who can least afford it

Edmund King, AA president

“The writing is on the wall for those who choose to read it: September’s online retailing up 8.25% on the same time last year and ONS statistics showing that the poorest 20 per cent of households are paying almost twice as much of their income in duties on fuel than the richest 20 per cent (3.4% v 1.9%).

“The discriminatory nature of fuel duty comes over loud and clear in this new AA/Populus survey: younger households more likely to have to cut back on food shopping, more unskilled workers cutting back on car use or being forced out of their cars, and one in four higher-income drivers not bothered by the duty rises compared to one in seven lower-income drivers.”

Autumn Statement (update)

The Chancellor's Autumn statement on 29 November 2011 included the following about planned fuel duty rises in 2012.

Given the current high cost of fuel, to support motorists and businesses, the Government announces that the 3.02 pence per litre (ppl) fuel duty increase that was due to take effect on 1 January 2012 will be deferred to 1 August 2012, and the inflation increase that was planned for 1 August 2012, currently expected to be worth 1.92ppl, will be cancelled. This will ensure that there will only be one RPI increase next year. The 5ppl discount for the Inner and Outer Hebrides, the Northern Isles, the islands in the Clyde and the Isles of Scilly will, in addition, come into force on 1 March 2012. The Government will publish details of the design of the fair fuel stabiliser at Budget 2012.

The AA’s campaigning has paid off as the Chancellor has seen sense on this vital issue. Cash-strapped drivers will heave a heavy duty sigh of relief as current pump prices are close to the record high

Edmund King, AA president

Comment

Edmund King, AA president, said: “The AA’s campaigning has paid off as the Chancellor has seen sense on this vital issue. Cash-strapped drivers will heave a heavy duty sigh of relief as current pump prices are close to the record high. This measure will not only be a relief to drivers but also to the High Street as drivers have less to spend if more money is pumped into their tanks. It is still tough on the streets for many drivers but at least the Chancellor hasn’t added to their pain. As the AA has been saying he understands that cars are a necessity and not a luxury.”

Regarding other aspects of the Autumn statement, the AA also gave a cautious welcome to the recognition that more investment is needed in the road infrastructure although a majority of AA members oppose the use of tolls to pay for extra capacity. The AA also welcomed plans to halve the cost of the Humber Bridge toll as a boost to mobility.

Edmund King, AA president, said: “Whilst we welcome plans to improve highway capacity, the majority of AA members are against the idea of having to pay tolls to use this extra capacity. We need to see the detail of how these schemes will be funded. “

(29 November 2011)

AA/Populus survey of 16,647 AA members, between 16 and 23 November