Tuesday, March 19, 2013

Quentin Willson says that high fuel duty is currently a 'corrosive tax'.


This is a plea, an entreaty, a cri de coeur. And it comes from the millions of struggling families and businesses across the UK. The unaffordable level of fuel duty in this country is causing widespread misery, holding back growth and as a tax that restricts the movement of goods and people on our roads, is deeply counterproductive. Every shred of research says the same thing. Consumers are spending and travelling less, disposable income is down, economic activity is reduced and we’re buying less petrol and diesel than ever before. And that’s simply because fuel the most expensive its ever been in the history of road transport.

And it’s deeply mischievous to try and marginalise this issue by talking about ‘motorists’ and ‘car lobby groups’. High fuel costs effect every single person in the UK whether they drive or not. Virtually everything we buy travels by road and any increase in fuel costs is always passed onto to the supermarket shelves and paid for by the embattled consumer. And here’s the thing; according to the CEBR, the debilitating effect of high road fuel costs in a recession is twice what it would be in a stable economy.

The financial modeling of the economic cost of high fuel duty in a recession really hasn’t been done before. I should know because FairFuelUK has been to the Treasury and provided august academic research to prove our case. Money spent on high levels of fuel duty isn’t spent in the wider economy. We simply don’t know yet how badly Growth and GDP are being damaged by the climbing costs of road transport, but the chilling evidence is mounting. Even the OBR agree that a 10% rise in fuel costs could reduce growth by as much as 1%, and in a time of almost flat GDP, that’s a terrifyingly enormous figure.

The weakness of sterling and oil market speculation means that the price of crude will continue to climb, so the only relief is to cut duty now. Postponing the September increase isn’t enough and it’s a rise that shouldn’t happen anyway. The UK economy needs an immediate reduction in transport costs to get us through the rest of 2013. And let’s not forget all those disadvantaged groups like pensioners and those on low incomes who struggle to cope with funding their basic mobility. Fuel duty is a deeply divisive social tax that hurts the poorest in society and restricts the freedom of individual movement.

I’m not holding my breath for a duty cut in tomorrow’s budget, but I hope the Government will start to understand that high fuel duty is a corrosive tax that imperils our economic and social wellbeing. These are unprecedented times that require unprecedented action. A significant cut in fuel duty is essential.




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[ posted by Mary Driver, 19.03.13 15:22 ]

I could not agree more with your post above. I cannot afford to fill up my vehicle with fuel at today's prices, Hense I never go anywhere anymore. Everything is increasing in price but wages are not keeping in line for the normal working person. My husband has not had a pay rise for 6 years yet the government still expect us to be able to pay horrendous prices for energy bills, fuel, food etc......We as British people need to get behind each other and lobby the government and say "Enough Is Enough"..Lower fuel tax and give our economy the kick start it needs otherwise we are going to end up on our knees............One very disgruntled British Citizen and sick to death of this government.

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[ posted by Libertyscott, 19.03.13 16:11 ]

It would be a small victory if the government announced no increases in fuel duty during this term of Parliament, that's a bare minimum given the need to get the budget into balance, but there also needs to be a new deal for motorists that confronts the other problem - the starving of money for roads. So how about this?

Bear in mind government spends £9 billion on roads either through the Highways Agency, or through local authorities and the Scottish, Welsh and NI governments.

1. Return to full hypothecation all revenues from vehicle excise duty (once called road tax) into a roads fund (which would be about £6 billion a year.

2. Add to that fund a dedicated 8p/l of fuel duty revenue, which would cover the remaining £3 billion and add another £1.1 billion a year to help address the enormous local highway maintenance backlog. This makes it more difficult to raise fuel duty without the question being asked "is it about the roads", or to reduce spending on roads without also reducing the tax collected from road users.

3. Target to reduce the remaining fuel duty down by 30p/l over time, so that it matches the EU floor level for fuel taxation. This would have to be matched by commensurate spending cuts.

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[ posted by Ian Stewart, 19.03.13 16:21 ]

I totally agree, in fact I sent an email to Gordon Brown several years back saying someting very similar. He didn't change anything and I doubt Osborne will now but the facts are simple- higher fuel costs restrict economic growth.

There are weeks when I struggle to pay for fuel to simply get to work and have considered phoning in sick to save the money. I know that I am not alone with this problem as colleagues have shared similar woes with me.

If fuel duty was cut by 40p/litre the economy would make a rapid recovery; it's common sense. People could look for jobs further away from home. Small businesses would have more cash for expansion and products delivered to retailers could be done so at less cost and as such their price reduced. This would lead to more spending and the economy would begin to grow from its current stagnation.

Additionally, families could once more enjoy days out and tourist destinations would see an increase in trade.

I find it almost incomprehensible that the 'powers that be' can't see this!

George Osborne- feel free to add 30p to the price of a chocolate bar. That's a tax of choice, fuel is a necessity not a choice. Something tells me his lack of economic understanding and cowardice will mean more of the same and he will freeze fuel duty and expect us to be happy about it.

I am beyond angry about the cost of fuel. Something has to change.

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[ posted by andy, 19.03.13 16:36 ]

If the Chancellor puts no extra duty on fuel, I hope he doesn't try to say that he is 'saving the motorist money'. He will not be, he will just be making motoring no more expensive. He can only save us money by reducing the duty. I get fed up with smug politicians using weasel words to justify their failings. We all know, and so do the Chancellor and his cronies, that fuel duty is crippling this country. We all know that a cut in duty would stimulate growth and thereby generate taxes from other sources. We all know people who are having to radically alter there habits and lifestyles to cope with the insane levels of fuel cost that we are exposed to. Our leaders are not reduced to riding 90cc motorcycles through freezing fog and blizzards to get to work, I am. I can only allow myself £20/month for fuel now. Even at 135mpg, it's a close run thing each month. I don't feel it is a party matter, whichever party were in power, I'm sure we would be having this same debate. Public transport is no longer an option in rural areas, even those in counties that are not remote. I'm glad I don't have to afford fuel in the Highlands and Islands parts of the country, those guys have it even worse. Through this campaign I have contacted my MP, all you get in reply is apologetic claptrap, no substance, no desire to help the people who are struggling, no answers, nothing. I think this government, and the one before it ought to be very glad they aren't in France, otherwise they might have had a few barricades to get through!

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[ posted by Darren, 19.03.13 17:09 ]

I see no reason why the government couldn't reduce fuel duty by 40p a litre and add that 40p to alcohol, tobacco, and fatty foods. As stated, fuel is a necessity for life, work, and effects everybody whether they can drive or not. By moving the duty to other areas, the government would not be losing much either (it would work out slightly lower as when the price of fuel comes down, so should the cost to buy the products due to lower transportation costs). Also, as well as alcohol, tobacco, and fatty foods being non-essential, choice products, they are also products that put a burden on the NHS and the police force (alcohol), so if there is some reduction there, that could only be a good thing too.

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