Fuel Duty Fair Fuel Campaign

[exportmanuk]

The following cut an past is for a trade association website ( BIFA) and whilst some of the figures quoted refer to trucks the proposed rise in fuel duty will have an impact on everyone, irrespective of their vehicle usage. Almost everything you buy has to come back truck at some point.

Please sign the E petition



http://epetitions.direct.gov.uk/petitions/347

One of the headline grabbing announcements made by the Chancellor, Mr George Osborne in his 2011 Budget statement was that Fuel Duty was to be reduced by 1 penny a litre. This small sum was seen as a step in the right direction, the largely overlooked bad news is that two Fuel Duty Rate increases are planned for 2012, the first in January, the second in April deferred to August.

Currently Fuel Duty is 57.75 pence per litre, during 2012; the duty rate will rise by 10.4%. On the 1st January the duty rate will increase by 3.02 to 60.97 pence per litre. In August there will be a second increase in line with the Retail Price Index which will add between 2.19 and 3.03 pence per litre to the cost of a litre of diesel.

The inescapable fact is that in order to deliver the customers goods: road plays an important part in supply chain. Much is made of increase rail and short sea usage, but these modes often require road to make the final delivery. Based on industry figures, a typical 44 tonne truck and trailer averages 7.5 miles per gallon and covers 70,000 miles a year. In total this typical truck will use 42,439 litres of diesel in the course of the year.

UK fuel prices rose by 15% between October 2010 and the same month in 2011, and fuel now equates to between 30-45% of the vehicles operating cost. The simplest way to understand the situation is that for every penny increase the truck costs an additional £424 per annum to operate. The anticipated 6 pence per litre will increase costs by £2544 per annum or £48.92 per week. These increases are particularly unfair because the Governments VAT yield increases when prices rise.

[fungus]

Highway robbers

[Horse]

OK, let's assume the campaign is succesful, and fuel duty is reduced?


Where should tax be increased to make up the difference?

[exportmanuk]

OK, let's assume the campaign is succesful, and fuel duty is reduced?


Where should tax be increased to make up the difference?

Do they need it that much every time the price of fuel goes up 6p 1 p is VAT direct to the treasury. because the price of fuel has increased so much in the last 12 months the are already receiving at least 2p per litre extra in VAT, that alone is a lot of revenue they had not calculated on getting, and is any of this extra revenue being spent on improving the transport infrastructure.

Fuel price increases hit everything we buy and everything UK PLC export. If they really must increase revenue further then maybe they should up the VAT on white goods ( this has been done before).

[ScoobyChris]

Where should tax be increased to make up the difference?

Smokers and cyclists

Chris

[Deer Stalker]

Evening all, first post an' all that so go easy on me

A problem that may well occur from this tax policy is that revenue may well actually drop off as motorists simply drive less. If they drive less, they will spend less as they will go shopping less

It's up to 11% as the fuel duty increase for next year at present, and most of what was written in that link are actually my words. So someone has copied them!

[martine]

Evening all, first post an' all that so go easy on me

A problem that may well occur from this tax policy is that revenue may well actually drop off as motorists simply drive less. If they drive less, they will spend less as they will go shopping less

It's up to 11% as the fuel duty increase for next year at present, and most of what was written in that link are actually my words. So someone has copied them!

Hi 'Deer' and welcome!

If you like, it's good to post a little about yourself here as it helps others to put any comments in perspective. It's not compulsory of course!

A problem that may well occur from this tax policy is that revenue may well actually drop off as motorists simply drive less. If they drive less, they will spend less as they will go shopping less

Is that actually true? I can agree some people will drive less but many won't as a car journey is not optional...I'd have thought overall revenue would increase.

Strangley, the cost of unleaded is reducing very slowy down 'ere in Bristol...saw it for a 'mere' 129.9 in the week

[michael769]

Is that actually true? I can agree some people will drive less but many won't as a car journey is not optional...I'd have thought overall revenue would increase.

Some economists believe that there is a limit to how much tax you can raise, and if you try to push past it then revenues will decline. The idea is that with excessive taxation people lose the incentive to increase their earnings (or to increase spending) - especially over the long term where inflation will erode the value of tax revenue.

It is known as the Laffer Curve: http://en.wikipedia.org/wiki/Laffer_curve

[MGF]

It appears we hadn't reached that point by 2010. We will have to wait and see what is happening in 2011.

http://www.ons.gov.uk/ons/rel/environmental/environmental-accounts/2011/environmental-taxes.html

[PeterE]

Some economists believe that there is a limit to how much tax you can raise, and if you try to push past it then revenues will decline. The idea is that with excessive taxation people lose the incentive to increase their earnings (or to increase spending) - especially over the long term where inflation will erode the value of tax revenue.

It is known as the Laffer Curve: http://en.wikipedia.org/wiki/Laffer_curve

I would say we're still some way below the peak of the Laffer curve in terms of revenue raised from fuel duties, but it's certainly the case that every 1% increase produces some way less than 1% extra revenue.

[YorkshireJumbo]

One of the main reasons for the tax increase is to reduce carbon emissions by encouraging people to drive less or use more efficient vehicles. Is it wrong to encourage this by taxation? No one's forcing anyone to use their vehicle...

[jont]

One of the main reasons for the tax increase is to reduce carbon emissions by encouraging people to drive less or use more efficient vehicles. Is it wrong to encourage this by taxation? No one's forcing anyone to use their vehicle...

Much better that businesses stop functioning and as the housing market also seems dysfunctional at the moment those who need to commute long distances for work give up and simply claim benefits?

Anyone who thinks public transport is a viable alternative to driving either lives in London or has never tried to use it in anger, particularly on anything approaching a regular basis.

[michael769]

Anyone who thinks public transport is a viable alternative to driving either lives in London or has never tried to use it in anger, particularly on anything approaching a regular basis.

I use it on a daily basis to travel from a rural area into central Edinburgh. But that is only because there just happens to be a station in the next village which I reach without much drama, the journey time is comparable to the car, the fare affordable (just) and running times are compatible with my lifestyle. The service is very well used and has seen a doubling in frequency in recent years with plans in place for further expansion as demand continues to rise.

Where decent public transport (which outside London and a few other inner city areas means rail) exists people will choose to use it. The problem is that its availability is patchy in much of the country and cheap quick fix interventions will not change that, which means that trying to make public policy based around moving people out of the car on a universal basis is futile, and made worse by the unaffordability of housing in major cities.

Unfortunately rail expansion is ruinously expensive (as increasingly are commuter fares on some routes) and, IMO, anyone who thinks that they can make people switch to the bus, outside London and the other inner city locations is living in a fantasy world. Unfortunately many in Westminster seem to fail to grasp how different our capital is to the rest of the UK.

[gannet]

I dread to think how london will cope with the olympics next year...

cant cope now...

[Horse]

Martin: there is IMHO a definite 'slowness' on the m-ways compared to a couple of years ago, so it could be that the 'e' tax is working - that said, just going slower isn't enough to balance the price hike!

There's also a view that part of the reductiin in road deaths over the last couple if years is due to the recession.