Chancellor George Osborne has said he is considering cancelling the fuel duty increase due to take effect in April.

There is growing pressure to have a rethink on an extra 1p-a-litre rise at a time when petrol prices have soared after oil price and VAT increases.

He told BBC WM that the government could do "something about it" in the Budget on 23 March, saying: "We can over-ride it. We are looking at that."

But Labour said coalition was "all over the place" on fuel pricing.

The government has come under pressure from motorists to scrap the duty rise, as the cost of a litre of unleaded petrol has risen to almost £1.30 because of high global oil prices and this month's VAT hike to 20%.
'Expensive'

Fuel duty already costs 58.95p for every litre of petrol.

Labour chancellor Alistair Darling announced a further 1p a-litre rise for this April in last year's Budget. This comes on top of an inflation-adjusted increase, meaning motorists are expected to pay at least an extra 3p a litre from this date.

Mr Osborne said he was also looking at the idea of a fuel stabiliser, so "the government steps in to try to protect people from the effects" of petrol price rises by cutting the level of duty.

When asked later about the possibility of scrapping the proposed increase in fuel duty, Business Secretary Vince Cable told Westminster journalists: "Any attempt to change the duty regime is expensive... but if he (Mr Osborne) says he's looking at it, then he's looking at it."

For Labour, shadow transport secretary Maria Eagle said: "The Conservative-led government is all over the place on fuel prices. Each week ministers raise expectations of action but they've still done nothing.

"Warm words from George Osborne about a 1p change on fuel duty are all well and good, but families are paying 3p a litre more at the pump because of the VAT rise he chose to bring in."

http://www.bbc.co.uk/news/uk-politics-12296633

I'd normally post that in the news section, but should it be 'axed' (is it just me or does that sound very Murdoch empire?), or should it be used as a revenue-raiser?

I don't drive, that's why I'm asking (though I'd imagine it would have a few knock-on effects )

It should be used as a revenue raiser. If he is serious about the deficit it needs to be increased. It is also a green tax.

He should freeze petrol duty and cut diesil duty.
Or stop charging road tax for HGV's. The more they pay, the more we pay for everything in the shops.

Here, the fuel prices fluctuate by about 10c every week at the moment! I drive around until either I have about 20km left in the site, or I see diesel cheap. I paid 1.37€ a litre last week, filled up to 1.27€ last night. No mention of changes in duty here, but they are investigating the fuel companies for price fixing at the moment, because the prices always mysteriously rise, just when people go on holiday...

We also have the Maut here, which is an electronic toll system for HGVs, which calculates how long they were on the motorways and charges them appropriately, in addition to fuel and road tax - all HGVs passing through the country need the Maut box to be installed as well. But they do get a 1c rebate per litre on diesel, compared to diesel for normal vehicles.

I'm afraid it isn't in any way, shape or form. The vast majority of road journeys in the UK are not discretionary. They are journeys people have to make. Increasing the price of those journeys through increased indirect taxation will not reduce their frequency at all. It's like saying if you increase the tax on food people will stop eating. It just won't happen. There is no green aspect to increased fuel duty. It is simply a revenue generating exercise.

If that's what it's intended to be then fine, we can either agree with it or not. But describing the fuel duty escalator as at all a green tax is disingenuous and frankly fatuous. If they really wanted a green tax system it would be based on emissions and encompass both personal and industrial ones. Chances of the tories increasing a hefty green tax on their megacorporation backers? Absolutely fat zero.

The actual, proper way to do this is to have a fuel duty escalator and ring fence any money generated towards sponsored research into clean engine systems and massively improved public transport. Chances of that happening? Also absolutely fat zero.


Jon

It's a 'green' tax in as much as people driving vehicles that consume more fuel pay more than people with more efficient vehicles. However, it's a relatively crude system as it doesn't take into account the types of emmisions in any meaningful way.
Having said that, I totally agree that it's a revenue raiser rather than a deliberate green tax. If the money coming in from fuel duty was used to pay for road repairs/upgrades and to fund/subsidise a decent and properly comprehensive public transport system then it would be somewhat easier to justify but that's not the case.

Yes but the cost to the environment and other externalities is four times the road and fuel taxes. So drivers are being still subsidised very substantially. Petrol duty might not be a particularly green tax, it is a crude emissions tax. To tax it more accurately would cost a lot more than fuel duty. It could mean spy in the cabs for every vehicle to tax you accordingly. That could mean a high upfront cost plus monthly bills possibly larger than you think. At least with petrol duty if you have no money you do not buy the fuel, but with cheaper fuel and a hefty emissions tax you could drive more than you expect because the fuel is cheap and then get hit by a much higher emissions tax.

With all due respect, that's far too fuzzy and complex an idea to make such a definitive statement about.

Jon

I doubt some of the externalities but even so road users are subsidised still even with all the road taxes.

[quote=''jonbwfc"]I doubt some of the externalities but even so road users are subsidised still even with all the road taxes.[/quote]

There is already so much direct and indirect taxation that is irrelevant to the subject, certain costs have to be met. Until the requirements of the deserving and needs of the nation are met then anyone complaining of increased taxes should probably shop in everyone they know who dodges VAT, claims unlawful benefit or employs anyone cash in hand before they start pointing out that the system isn't fair.

The problem is moot anyway. We have to use petrol/diesel to move stuff around. There is no viable alternative. Even factoring in rail transport to get good from Depot A to Depot B, you have to get them to/from the depots somehow. Electric/hydrogen lorries? The automotive industry can’t even make electric cars with a decent range, let alone anything with the pulling power of a truck. Add to that the total lack of infrastructure to support such vehicles, and you realise that it’s a fool who buys an electric car for anything more than shopping trolley duties, and a total idiot who relies on it for anything more important.

People can use public transport for your daily commute. As the transport historians amongst you will recall, a certain Dr Beeching decimated the rail transport network. All those rural areas which once had a railway station are now reliant on cars and busses. Other people commute because it is impractical (or too expensive) to move closer to their work. I’m thinking of public sector workers whose jobs are in places where property values are far higher than their incomes could support a mortgage.

The problem with all this “green tax” lark is that it’s very easy to dish out the punishment for using “bad things” but as there are no “good things” for people to easily migrate to. If you want to hit people with a green tax on fuel, then you need to have alternatives in place. Efficient, connected public transport for one. Proper, readily available and sensibly spaced electric/hydrogen vehicle recharging points. Electric cars (if you have to go down that route - personally I think it’s an evolutionary dead end) which charge in minutes, not hours. Ensure that alternative fuels can be used by freight, HGVs and PSVs as well as personal transport. None of this is in place yet - and unlikely to be for at least a decade. Until they are, imposing a tax as a “green tax” is disingenuous, and fraudulent. It’s revenue raising, pure and simple.

As far as co ordinated public transport that is unlikely now that it has been privatised and it will be tough to co-ordinate an efficient system.

Yes it raises revenus now but without it there is no incentive to develop alternatives.

The railways were losing money hand over fist, and Beeching was given the task of trying to make them profitable.

He succeeded, but it left a legacy of destruction and a bitter taste in the mouth. The question we have to ask is whether, with hindsight, if the railways had been left in their pre-Beeching state, whether we'd have a railway network at all today.

As things stand with it there are no incentives to develop alternatives. There's simply a disinsentive to carry on as we are, while not actually giving people any practical alternative. It's all stick with no choice other than to carry on being hit by the stick. There's not only no carrot, there's not even a 'please stop hitting me with a stick' option.

The government is raising more and more revenue in fuel duty & VAT on fuel while significantly cutting - never mind improving - the funding to public service transport and higher ed research into alternative engine technologies. The idea that equates to a 'green tax' is bunk. This government has no more interest in being green than it does in being red.

Jon

The problem now is that we really need a connected rail network. We can’t rebuild on old tracks because they have been sold off. As I’ve said before, railways are part of the infrastructure and should be state owned and run. Interestingly, Belgium subsidises its rail network and travel is pretty damn cheap. If they are losing money, it’s obviously considered a loss worth bearing.