You can’t have failed to notice the prices of fuel creeping up at the pumps for no apparent reason. The cheapest price in Blackpool that I have found is 111.9p per litre of basic unleaded (Shell on Talbot Road and Morrisons at Squires Gate); not quite the 120p of the previous fuel price surge but that could soon change.
Labour loves taxing (especially by stealth). I think we can safely say that’s a given. But you’ll sometimes hear Gordon Brown lambasting the opposition because of the old Fuel Price Escalator, which shuttled the cost of fuel in Britain upwards from one of the cheapest in Europe to the most expensive.
At least the Conservatives were honest about it. The chancellor at the time, Normal Lamont, created a fuel duty escalator, called it a… fuel duty escalator and there were no smoke and mirrors.
“The last Government introduced a road fuel escalator, the principle of which we supported. They set it at 5 per cent. Since July it has been 6 per cent. There is agreement that only with the use of an escalator can emission levels be reduced by 2010 towards our commitments.”
- Gordon Brown, Budget speech 1998
So Gordon supported it, increased it and his intention was clear. Escalate until 2010.
Unfortunately he didn’t factor in the petrol strikes and protests in 2000. It was only then that Labour decided to take their thumb off the big red tax button, with a tax freeze on fuel for a few years and a few token gestures and lip service to hauliers.
“When the oil price is falling or gently rising, yes, there is a role for a fuel duty escalator”
- Gordon Brown, Oct 2000
Ten years later, Gordon Brown is upping the fuel duty by 1p per litre above indexation every April for the next 4 years. Above indexation means that the current fuel duty will go up by the rate of inflation and the 1p will be slapped on top of that. All of this was dishonestly slipped into budget paperwork by the insidious alien Alistair Darling.
Let me demonstrate with a calculation (correct this if I’m wrong);
The current Consumer Price Index suggests an annual rate of inflation of about 3.5% so I’m going to assume that’s the indexation by which the fuel duty will be increased. The current fuel duty is 56.19p per litre. So with inflation it’ll go up by 3.5%, meaning that fuel duty goes up to 58.15p per litre. Then on top of that you’ve got the additional 1p per litre, meaning that as of April the 1st you will be paying 59.15p per litre in fuel duty rather than 56.19p per litre.
If you add VAT onto that, you end up with petrol prices increasing by just under 3.5p a litre in real terms.
This is not the daylight robbery that the original Fuel Price Escalator was between 1993-1999, because under that prices rose by 3% above the rate of inflation (rising to 5% then upped to 6% when Gordon Brown became chancellor), but the principle is exactly the same. It’s a fuel duty escalator introduced by Labour.
Don’t forget, fuel duty had 2p applied to it last year in order to offset the reduction in VAT to 15%. But we’re back at 17.5% now and you will notice that the 2p is still in place.
The other fuel duty rises in 2009 were because there was a reduction in demand for fuel, resulting in a shortfall of about £400m in revenue. I don’t get it: they put fuel tax up to force us to drive less, but when we drive less, they put it up again to make up the shortfall in tax. The motorist loses either way, but if people ditched cars altogether and killed the demand for petrol, there would be job losses in the industry as well as serious tax implications for the Government. They’d have to get the money from somewhere, because it’s contributing to the NHS, the armed forces, public sector salaries, and so on.
The last time fuel prices approached 120p per litre, the cost of a barrel of oil was around $150. It’s about $85 now, yet the fuel price is rocketing week on week. I’m afraid Gordon Brown is to blame again because the weak pound is contributing to increased import costs which in turn are being passed on to motorists. As he himself famously said;
“A weak currency arises from a weak economy which in turn is the result of a weak Government.”
Is it not, therefore, time to remove Gordon Brown and his weak Government?
A fantastic quote to end the article Phil. I think we all know the answer to the question it poses though
Cheapest up here is now 1.139 for unleaded and 1.149 for diesel.
I’m still not wholly convinced all the maths add up to be honest though. Oil is only just over half what it was 2 summers ago when we saw the massive rises but already we’re on the brink of hitting those prices again.
So what on god’s earth is going to happen when demand surges and the price of oil goes higher. Wouldn’t be too surprised to see prices in the region of £1.50 – £1.60 per litre by this time next year.
Of course next year we also see the rise in NI contributions.
This is all just the beginning (of the end for many people) of us paying back for years of this one eyed Scottish berk spending our money like it was going out of fashion.
As I mentioned, the fuel duty escalator is in place until 2013, so presuming inflation is around 3%, next year fuel duty will be around 62p a litre, then 65p, then about 69p.
All plus VAT which, if fuel prices continue to rise as predicted, will reap an increasingly large amount for the treasury.
Splendid words JR, a shite government indeed, get em out in few months!
“They’d have to get the money from somewhere, because it’s contributing to the NHS, the armed forces, public sector salaries, and so on.”
Dont forget the biggest twats of the lot: Propping up the banks.
And if proof were ever needed that the man has about as many active brain cells as he does fully functional eyes, he’s now admitted he made a “mistake” at the Iraq enquiry about defence spending.
There really is no end to this man’s blundering. For fucks sake Britain do the decent thing on May 6th and send him back to Kirkcaldy “tae think again”.
This should put a stick towards the backside of those characters in the Gazette who state they prefer to drive to Preston rather than shop in Blackpool.
It will soon be shop in Blackpool or use public transport. Either is a win win for me.
Not really because the cost of parking in Blackpool is a lot more and a couple of litres of fuel goes a long way these days!
In that case Phil, raising the tax on fuel shouldn’t be a big issue.
The only change I would make is to lower the tax on the fuel for haulage companies, in order to help keep food costs down.
Fuel duty will keep on going up. It’ s a win win situation politically. When people are priced out of driving to work and can’t afford public transport either the claim will be that we are now greener. If it doesn’t work and people drive anyway then there’s more money to splosh around on some unnecessary project.
We don’t even know that global warming is happening let alone that if it is whether it’s man-made or if reducing emmissions will solve it. Population control measures would be far more effective if CO2 was a cause anyway.
Global Warming is not happening. It’s nothing more than a cash-cow for Labour and the loony left to tax us all out of our cars !
Oddly enough there was an IceAge a little over 10,000 years ago that the world warmed up from. I dont remember reading about there being too many Range Rovers or nasty 747′s doing too much damage in those days.
Fuel duty has nothing to do with the environment,if they were that concerned about the environment they would build a better road infrastructure, to keep us all moving, instead of the 1000 of hours a year that motorist are stuck in badly thought out highways,it is just a easy way of taxing.How many thousands of man hours per year does the industry lose because of staff been caught up in traffic jams,it must be a wagon drivers nightmare these days. It is also about time they introduced a charging system for all foreign haulage company’s to ply there trade in this country, and a lot of foreign trucks have extra fuel tanks fitted so that they don’t have to fill up in rip of Britain, thus avoiding contributing to our road system,yet if we want to use there motorways we have to pay a toll,otherwise the other option is to rebate fuel to British registered haulage company’s to allow them to compete on a level playing field. Same with taxis they are supposed to be part of the Public transport system yet they do not enjoy the any fuel subsidies as bus company’s enjoy, this is one of the greatest costs associated with running a taxi and there are a lot of people who have to rely on taxis who can no longer afford them,this would be a way of reducing fares in taxis to make them more affordable. Wheelchair excessable taxis should also be VAT exempt, to allow more drivers the option of purchasing one rather than running a saloon type vehicle. The government collect a lot of VAT on a £30,000 taxi sale.