Removal of halt / cap on fuel duty

[whole diary]

[grahame]

From the front page of The Telegraph today, via the BBC^» (British Broadcasting Corporation - home page) review of the papers



Just a headline, but I find myself wondering is at actually such a bad thing is the halt on fuel duty rises is removed, and indeed if some of the past rises that should have happened actually do?

It was The Telegraph that laid out its front page with a picture of a distractingly bright lady to the right of the article, and the BBC that chose to select which part of the page to show.  Please do not be distracted by the picture from a subject that could make a huge difference.

[TaplowGreen]

From the front page of The Telegraph today, via the BBC^» (British Broadcasting Corporation - home page) review of the papers



Just a headline, but I find myself wondering is at actually such a bad thing is the halt on fuel duty rises is removed, and indeed if some of the past rises that should have happened actually do?

It was The Telegraph that laid out its front page with a picture of a distractingly bright lady to the right of the article, and the BBC that chose to select which part of the page to show.  Please do not be distracted by the picture from a subject that could make a huge difference.

Not the first tax rise & won't be the last........all these generous publicly funded pay rises have to be paid for somehow! Pinching the pensioners fuel payments was never going to be enough by itself!

[broadgage]

I would support an increase in fuel duty. In my view the price has been held too low for years.

Retail petrol and diesel prices have been roughly constant for about 10 years, but train fares are ever increasing.

[didcotdean]

There is currently a "temporary" reduction in fuel duty of 5p per litre in place that was first made in March 2022.

The previous government indicated:

This 5ppl cut will end on 22 March 2025 as part of the government’s commitment to fiscal responsibility and ensuring trust and confidence in our national finances.

So allowing the expiry to happen is just honouring this.

Fuel duty rises are supposed to be plumbed in each year, and this is assumed always in the forward calculations of government revenue in years to come. The fact that these have been suspended on a yearly basis for a long time has been a distortion to this process.

[grahame]

Fuel duty rises are supposed to be plumbed in each year, and this is assumed always in the forward calculations of government revenue in years to come. The fact that these have been suspended on a yearly basis for a long time has been a distortion to this process.

Motor fuel in now around the same price it was a decade ago - a tad over £1.40 per litre though it peak much higher at around £1.98.  Around 4000 million litres of fuel are sold every month - very roughly 50 billion litres a year. So if 20p were added to the cost of each litre taking it up to £1.60 per litre, that would be an extra £10 billion which goes a long way to solving Rachel Reeves' black hole.

As a lone measure, I suspect that fuel sales would not drop very much though this is an income for only a few years as people more to electric cars.    As a measure to support public transport to get bums on seats - fare cap £2  per journey + 15p per mile, buses and trains, anyone, I suspect it could .... well, I will let others speculate

[broadgage]

A significant increase in road fuel prices would also save lives, consider not only the human cost, but the expense to the NHS of traffic accidents.

When the last substantial increase in fuel prices occurred, fatal accidents reduced. High petrol prices achieved what decades of speed trap cameras and drink drive rules could not achieve. Some drivers even kept to the speed limits, and others drove more carefully and coasted up to red lights and stop signs.
The modern way, with cheap fuel, is to drive at say 120% of the speed limit until close to a stop sign or red traffic light and then to brake hard.

[TaplowGreen]

There is currently a "temporary" reduction in fuel duty of 5p per litre in place that was first made in March 2022.

The previous government indicated:

This 5ppl cut will end on 22 March 2025 as part of the government’s commitment to fiscal responsibility and ensuring trust and confidence in our national finances.

So allowing the expiry to happen is just honouring this.

Fuel duty rises are supposed to be plumbed in each year, and this is assumed always in the forward calculations of government revenue in years to come. The fact that these have been suspended on a yearly basis for a long time has been a distortion to this process.

The main reason that fuel duty was reduced/frozen was that petrol price rises (at a far lower level than some are advocating here) were the main reason that inflation was soaring in 2022.

You (and others suggesting that it should be increased by up to 20p a litre) would do well to bear in mind the effect that this would have on inflation, businesses, services and prices elsewhere when suppliers pass on the increase in their costs to others in the supply chain and end users/customers.

[Western Pathfinder]

Looks like we are in for another round of kick the motorist where it hurts ,that's going to do this recent prime minister a whole lot of good.

[Timmer]

Looks like we are in for another round of kick the motorist where it hurts ,that's going to do this recent prime minister a whole lot of good.

He seems to want to pick fights with motorists, pensioners and now smokers. Who’s next?

Not good if you are a pensioner who drives to the pub and likes to have a smoke in the beer garden with their pint!

[didcotdean]

There is currently a "temporary" reduction in fuel duty of 5p per litre in place that was first made in March 2022.

The previous government indicated:

This 5ppl cut will end on 22 March 2025 as part of the government’s commitment to fiscal responsibility and ensuring trust and confidence in our national finances.

So allowing the expiry to happen is just honouring this.

Fuel duty rises are supposed to be plumbed in each year, and this is assumed always in the forward calculations of government revenue in years to come. The fact that these have been suspended on a yearly basis for a long time has been a distortion to this process.

The main reason that fuel duty was reduced/frozen was that petrol price rises (at a far lower level than some are advocating here) were the main reason that inflation was soaring in 2022.

You (and others suggesting that it should be increased by up to 20p a litre) would do well to bear in mind the effect that this would have on inflation, businesses, services and prices elsewhere when suppliers pass on the increase in their costs to others in the supply chain and end users/customers.

The RAC has claimed that fuel retailers have actually largely trousered the 5p a litre reduction for themselves over this period.

This is not unusual behaviour unfortunately after tax reductions and has been encountered previously with VAT^▸ (Value Added Tax) changes, such as those on ebooks.

As an alternative maybe retailers could be charged a windfall tax instead ...

[grahame]

He seems to want to pick fights with motorists, pensioners and now smokers. Who’s next?

Not good if you are a pensioner who drives to the pub and likes to have a smoke in the beer garden with your pint!

Yeah - but that's one p***ed off pensioner an vote lost for all three or four changes.  Once you've lost a vote, you've lost it. No matter the passion it's one vote.  Or have you?

 I walked into town today and an old boy cycling the other way stopped for a chat. During the conversation it came out that he voted for Michelle Donelan our Conservative candidate and ex-MP^▸ (Member of Parliament) not because he thought she was the right choice (too left wing for him) but because his candidate had no local chance and he did not want the Lib Dem to get in.   And big criticism of the new MP for not having an answer to his local questions.  I pointed out to him that a team had to be set up (and agreed Michelle's local team had been good) and that candidates may think about that before the election but can't be presumptive. 

Not fertile ground then for myself if I were standing again ... I don't hide my views and tend to change them only as time changes and / or as I learn better and as I said to him "you and I have different views and there are some principles you won't change".  And then the 'surprise' - "you [would/do] have my vote. You keep us informed, tell us as it is -  we know where we stand and your heart is in the right place" ... goodness ...

So ... the environment needs brave steps. And I DO hear members talking about the effect on the economy and inflation  of bumping up fuel tax - I'm not un-aware and made some starting suggestion on that but I fully admit that I don't know or understand all the ramifications.   And the voters might not be quite as turned off ...

[broadgage]

There is currently a "temporary" reduction in fuel duty of 5p per litre in place that was first made in March 2022.

The previous government indicated:

This 5ppl cut will end on 22 March 2025 as part of the government’s commitment to fiscal responsibility and ensuring trust and confidence in our national finances.

So allowing the expiry to happen is just honouring this.

Fuel duty rises are supposed to be plumbed in each year, and this is assumed always in the forward calculations of government revenue in years to come. The fact that these have been suspended on a yearly basis for a long time has been a distortion to this process.

The main reason that fuel duty was reduced/frozen was that petrol price rises (at a far lower level than some are advocating here) were the main reason that inflation was soaring in 2022.

You (and others suggesting that it should be increased by up to 20p a litre) would do well to bear in mind the effect that this would have on inflation, businesses, services and prices elsewhere when suppliers pass on the increase in their costs to others in the supply chain and end users/customers.

The RAC has claimed that fuel retailers have actually largely trousered the 5p a litre reduction for themselves over this period.

This is not unusual behaviour unfortunately after tax reductions and has been encountered previously with VAT^▸ (Value Added Tax) changes, such as those on ebooks.

As an alternative maybe retailers could be charged a windfall tax instead ...

I don't feel that a windfall tax on road fuel retailers is called for.
It is an article of faith within the motoring lobby that fuel retailers make huge and excessive profits.
The facts suggest otherwise with many filling stations closing down and either lying derelict or being re-used for housing.

Perhaps the AA and/or the RAC should operate their own network of filling stations and show us all how it should be done.

[Electric train]

Cannot see how it can be claimed as a "tax grab"   The 5% reduction in fuel duty was a temporary measure by the previous Chancellor of the Exchequer to counter the fuel "crisis" when Russia invaded Ukraine.

The area in road fuel prices that need to be tackled is the time it take for the price at the pumps to drop when the wholesale price drops, they put it up quick enough   

[Oxonhutch]

The area in road fuel prices that need to be tackled is the time it take for the price at the pumps to drop when the wholesale price drops, they put it up quick enough   

Rocket and feather - Up like a rocket; down like a feather.