The Automobile Association (AA) has issued a pre-election challenge for all political parties to commit to a continued freeze on fuel duty after research revealed that UK drivers are still hit with the highest level of fuel duty in the European Union.
The call, which comes ahead of next week’s budget, comes after analysis by the AA showed that despite a four-year freeze in fuel duty, 69 per cent of payment for a litre of petrol is taxation.
It has already been confirmed that fuel duty will remain frozen until after the general election in May, but the AA has called for a commitment from all parties to keep fuel duty frozen until it at least matches the average of the three highest levels of tax in neighbouring EU countries. The AA have also called for a commitment that two-thirds of fuel duty revenue will be set aside for road improvements, maintenance, gritting, street lighting, green motoring infrastructure, cycleways, and safer pavements. This comes after a Populus survey of 19,303 AA members late last year.
In the past calendar year a combined 45.7 billion litres of petrol and diesel were consumed in the UK, and with fuel duty frozen at 57.95p per litre that equates to £26.5 billion coming into the treasury from tax on fuel. If the AA’s call were answered, £17.7 billion would be pumped into financing UK roads, almost double the £8.35 billion which the Department for Transport’s own figures show was spent in 2013/14. In addition to the £17.7 billion the Government makes from fuel duty, another £6.1 billion comes in from vehicle excise duty, £9 billion from VAT on fuel, and £15 billion from VAT on car sales, company car tax, and insurance premium tax.
AA President Edmund King said, “Our members appreciate that, with huge swings in the price of petrol and diesel since 2011, the Government's freeze on fuel duty hasn't added to the burden on family and business finances. But, the fact that UK drivers still pay the highest level of fuel tax in the EU shows just how massively pumped up fuel duty was before the Coalition froze it. It still generated more tax for the Government than business rates and only £400 million short of council tax receipts in 2013/14."
"Consequently, so many drivers are saying, rather than a cut in fuel duty, we want a continued freeze and more of it spent on what it is supposed to do: keeping UK roads fit for purpose, upgraded to meet new demands and making them safer. Drivers are sending out a strong message to all political parties that they could vote with their wheels unless there are clear commitments to fair taxation and expenditure."
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