2 ÓCentre for Economics and Business Research Contents 1. Introduction and summary 4 1.1. Introduction 4 1.2. Summary 4 2. Background 6 2.1. Introduction 6 2.2. Distributional impact of a rise in fuel duty 9 2.3. Economic consequences of a rise in fuel duty 9 2.4. The impact of the freeze in fuel prices 10 3. Extent to which duty changes are passed through 11 3.1. Introduction 11 3.2. The theory 11 3.3. Empirical evidence 12 3.4. OBR assumptions 12 3.5. Conclusions 12 4. Distributional impact of a 23% rise in fuel duty 13 4.1. Introduction 13 4.2. The scale of the increase 13 4.3. Impact by income level 13 4.4. To what extent can vehicle users cut their usage? 15 4.5. Affordability of electric vehicles 16 4.6. Ability to use public transport or walk 17 4.7. Disability 18 4.8. Impact by region 18 4.9. Impact on vans and other light goods vehicles drivers 19 4.10. Impact on HGVs 22
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