Is it time to reduce Tax on Fuel.....?

Discussion in 'Current Affairs, News and Analysis' started by heard_it_all_before, May 22, 2011.

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  1. Here's one for the Forum Economists....

    It costs me about £100 to fill my 4x4 with diesel and from that roughly £70 is paid in tax to the treasury, which then means that I have £70 less to spend in other areas of the economy. The resulting effect being less spending and less jobs which in turn equals more being paid out in benefits. The circumference of the circle grows ever and ever bigger.

    Therefore, and I know that there's a fat chance that it'll ever happen, but given that a large proportion of peoples income goes on Fuel Tax, what would the effect on the economy be if the government were to drastically cut the Fuel Tax and as such, leave people with more money to spend.?

    Surely, as long as a very large warning shot was fired over the bows of the oil companies to prevent them from increasing fuel prices, and as long as the government could borrow enough cash to cover the short term drop in income, this would be as good as any way of getting people into work..
  2. I agree , the impact of high fuel costs is causing prices to rise for everything in the shops , not to mention the impact on business that run fleets of vehicles , it would seem to me that fuel cost is one of the key reasons we have inflation at the moment.
    Thing is we are not complaining or protesting and to be fair the cost of fuel is on a par with the rest of europe or at least our near neghbours, and most MP's get their fuel on expenses so why will they bother ?
  3. But that £70 is pure government profit to spend on the necessary things like run the country. If you had that money and bought some services only a small proportion of the money will end up as tax. Secondly, the government is committed to reducing its emissions and finally, if everyone went out on the roads as a result of lower tax, there would not be enough roads to support the extra traffic. Petrol tax provides a throttle on the usage of cars and with it congestion is reduced.
  4. Really? A large number of people live outside of towns where there is "reliable" public transport, cars to these people are actually a necessity. Did the congestion charge (tax) in London reduce congestion?
  5. Yes, I think it does need to be cut. It is crippling the haulage industry, to name one, and this has a domino effect on almost everything from food to building supplies and is and industry which doesn't get recognised for how important it is to our country, IMO.

    Yes it does bring in a lot of tax to pay for running the country, but when there is more tax on a litre of fuel than the litre is worth it has surely become ridiculous.

    And with less people driving because they cannot afford it, that would surely also mean less people paying road tax, tolls, etc?
  6. What annoys me is that Bio Diesel appears to be taxed in exactly the same way as pure diesel and is, if anything, slightly more expensive. The tax is not about reducing vehicle usage or congestion. It's all about money flowing into the coffers. The RFL differential has had no impact on car buying with more 4x4's being sold than ever before.
  7. So in an effort to reduce emissions it is clearly in the interest to make fuel stupidly expensive and cripple the economy? What a marvelous idea.
  8. I wrote to my MP regarding bio diesel, as what happened with diesel happened with bio diesels. The government realise people are switching over to bio diesel in an effort to try and save some money and in doing so reduced their emissions. So what does the government do, it raised the tax on bio diesels thus rendering the claim that they care about the environment an outright lie (as if there was any doubt to begin with).

    Being "green" is the latest form of being able to tax the living daylights out of people.
  9. Fuel cost (and therefor the duty on it) is also a major driver for increased inflation.
    Excess fuel taxation is killiong economic growth, reduce fuel prices (preferably below the prices of our EU neighbours) and the economy gets a serious kickstart.
  10. Slightly amended that for you...
  11. Similar price across Europe.
  12. I thought this thread was in the 'Serious Bit' not the Naafi Bar.

    Welfare state is all part of being a modern nation, some people need support. I suggest you stop reading the Daily Mail. And, do you suggest we become isolationist little Britain and screw the rest.
  13. What's the worst that could happen?
    • Like Like x 1
  14. lengthy post warning.

    The simplest way to kickstart the economy would be for the Govt to invest in a building a national asset that had a production output and does not directly compete with any other industry.

    Namely, a national fibre-to-the-premise (FTTP) telecommunications infrastructure. The cost of which, based on BT's worst-case cost scenario in 2007, is £25billion.

    A quick caveat. I am aware Mr Davis, MP, mooted this earlier in the week. I have been advocating this since 2007, and with some differences to Mr Davis; notably PAYING a real working wage (and not working for JSA rates), and the ability to work out that BTs labour cost was based on a real wage, then using JSA rates would significantly reduce the headline figure. I digress. Oh, and that I have an extensive telecommunication background.

    A splash inthe ocean for an economy with a GDP around £2.1 trillion, and could be achieved in 18-24months, and drastically reduce the welfare bill during that timeframe.

    The workforce exists; a 2million strong pool of workers with skills from casual labour through plant operation, fibre pulling, field engineering, project management, infrastructure management, and so forth. In other words, all the skills necessary.

    100% national rollout within 24months sounds infeasible, but its simply a question of scale. BTs timescale was 10 years, but that was based on using BTs in-house resources. To contract into a 2 year timeline, its simply a matter of scale. Hitting every exchange and street cabinet in a give area simultaneously, and not in a patchwork roll-out. Yes, careful planning is needed, but no more than in any other project, because there is no inherent difference in the work being done, other than scale of the overall project.

    By paying a working wage (ie, the going rate), we are putting money into people's pcokets. Directly. And not in to the vacuum of the banking system. 32% of this comes directly back to Govt via direct taxation. But the two real benefits are:

    a. A massive decrease in the welfare bill, as we lift people out of unemployment and tax credits. A HUGE decrease in LGA spending on housing benefit, and revenue increase for LGA with an uplift in council tax (as opposed to the notional spending on CT relief).

    b. Injection of cash into the business sector through increased personnel spending power of a revitalised labour force. And in local business - ever seen empty sandwich shop near roadworks, for example. This boosts local economy, boosts local recruitment... and guess what, improves business profits and thus business tax revenues.

    Once completed, the avg household has access to at least one broadband service (the national net) or competing services (FTTP, cable, adsl, adsl2, BT Infinity), depending on cost. The Internet is a disruptive enabling technology; it disrupts existing technologies, but paves the way for new, hithertoo unseen services. real-time Pay-Per-View becomes a reality, and avilable not just on a per-household basis, but on a per-device basis.

    Who would manage the network, and on-going maintenance and repair? Simple, management should be maintained by Govt but on a partnership basis; a consortium of BT, GX, C&W providing a NOC/NMC infrastructure c/w with 1st line, engineers, management, DR, and so forth, on a 10yr rolling contract. FED services retained either under the same arrangement, or wholly in-house, or via local contract with BTO, CX, etc.

    Access to the network. This is the main contentious point, as it has the potential to massively interfere with the business models of the telco's and ISPs. However, it is no different to the current situation in regards to a telco or ISP that requires national reach services; you use BT (despite what GX, C&W et al state, BT is the only telco with a wholly national reach infrstructure - everyone else can promise delivery, but once you have a destination that goes off-net they will use BT for last-mile delivery). Hence, access is sold to anyone who requires services, including BT.

    This immediately improves the position of *every* ISP and telco in the country, oddly enough including BT. You want to offer a 50MBps broadband service? You can. 75mbps? You can. 100mbps? You can. The same as today, no need to build and deploy your own network or backhaul; overly and rent from someone else.

    Davis's detractors made an issue that the construction industry would be wiped out, faced with the threat of a massive govt-funded labour force. This was a non-argument, as the proposal is to limit the use to building and deploying FTTH, not for any construction project. Secondly, the construction industry would benefit; not every area will have the required skills "on tap", some would need to be bought in (surveyors, for example), and some plant operators (the London flood defences spring to mind, not enough local labour so RE Plant Ops were moonlighting on the project).

    I warbled enough. There are points I haven't covered, including some obvious apparent negatives, but I'll deal as-and-when if needed.

    Detractors of Mr Davis
  15. Watch out, your halo's slipping. I think I made a perfectly serious point - while this government (and the last) tax the working population dry, we hand over money not to Oxfam, Medicines Sans Frontiere or other charities, but to corrupt third world officials, so that you're lucky if 10% of 'overseas aid' aids anyone except some fcuking despot to buy a new Range Rover. And you're right, some people do need support - a tiny minority. The welfare state was designed to be ' a net that no-one should slip through' not offer a lifestyle choice to the bone-idle and low-level criminals. Beveridge would be spinning in his grave if he saw what it had become.