The UK fuel crisis- what's the point?

Great Debates
1

A brief outline, the oil refineries are being blocked by truckers, farmers, taxi drivers etc, all complaining about the level of fuel tax in the UK. The fuel tax’s reasons are twofold - First, as a source of taxation which would otherwise be made up in another area, for example, an increase in income tax which would more undesirable IMO.
Second, as an incentive to encourage the private car owner to use public transport and prevent some of the externalities, such as pollution, traffic congestion, an increase in asthma in children which has to be treated by the NHS etc.

I can understand the reasons behind the blockade - people want cheaper fuel - with the money that Britain has gained from the increase in oil prices, we can afford to reduce it by 8p a gallon - but really, wouldn’t that money be better invested in public transport to provide a viable alternative to the car - which we as a nation seem to think indispensable. Also - truckers and farmers could be subsidised for their petrol costs and taxis could be converted to liquid gas ( not too sure about the exact phrase, saw it on the news last night) which is only 30p a gallon and gives off fewer emissions. The difficulty here would be where to draw the line on subsidies.
I am biased as I get the bus to school and have done since I started and am rather hoping the crisis continues as I would get days off school. However the cost to business could not be claimed back and everyone would be affected - food deliveries would not be completed and the emergency services would not be able to run. Blair cannot afford public disturbance with an election coming up, but I think he should stand his ground and not be dictated to by the public, who are now reacting to the annual increase in fuel tax ahead of inflation.

2

There is a campaign against indexed fuel tax rises here in Australia too. It is true that indexed tax changes exacerbate any inflationary effect of oil price changes and that people feel a fair bit of pain when the bowser price goes up, but given the similarity of the campaign themes across countries, I am starting to wonder whether OPEC might have hired a PR company to divert public opinion.

Damn, I’ve just posted a conspiracy theory. My credibility is shot.

picmr

3

nadin - You have set out the present situation concisely and accurately. As you point out, the protesters simply want cheaper fuel. They have now stumbled upon a very effective way of making their case. Two further points are worth considering.

(1) High fuel taxes have proved an inefficient means (in Britain at least) of reducing car usage and petrol consumption. An environmental defence for the present tax levels has therefore become unconvincing. It is however far from clear what method the government ought to be using to decide the level of petrol duties. A cynical answer might be that the government always fixes them at the highest level it feels it can get away and that any concessions it might make to the protesters will simply reflect that.

(2) Justifying specific revenue increases on the basis of specific long-term expenditure rarely produces the long-term expenditure. The state (particularly in Britain) is not very good at long-term planning. Elections and changes of government are always likely to interfere with present good intentions. It is therefore far better to argue that increased investment in public transport etc. is desirable, whatever the means used to fund it.

4

I vaguely remember a similar fuel “crisis” in the 1970s, so I think the fun bit will be when public suspicion of a knock-on effect on delivery of goods of any kind leads to panic buying of bread, flour etc. (Already funeral directors are demanding that they be allowed a sort of “essential serivce” facility similar to that of ambulances etc.) That should strike a nice note of gloom. Maybe I should start a thread re. "How can Celyn plus cat stowaway on a ship to U.S.?

5

Nadin said:

I must say, I have mixed feelings about this. On the one hand, it’s a tax that affects those that use fuel the most - appropriate if it is intended to be either an environmental tax, or a way of dissuading people from using their private cars. On the other hand, you don’t have to live far outside a major town before a car becomes a necessity. Leaving the south-east aside, many of these people earn far less than townies who just use the car for dropping the kids off at school or popping down to Tesco. They end up paying a disproportionate amount of tax - to those, it would be fairer to have income tax increased.

And APB said:

It’s all well and good talking (as both this and the previous government have) about the fuel-price escalator being intended to drive people off the roads and into the rather grimy embrace of public transport, but that just isn’t a viable option for most people. Again, if you live outside a major town or city, the public transport system isn’t much use at all.

I’m probably in a better position than many to switch: I live 10 miles from where I work. It takes 15 minutes to walk to the station, about twenty minutes on the train, then either a fourty-five minute walk, or the hope of catching a bus going in the right direction. However, it normally takes me twenty minutes in the car, and still costs less.

If I remember correctly, the government commissioned TRL (the Transport Research Laboratory) to conduct a series of studies some 5 or 6 years ago into this issue. The conclusions were that fuel price increases alone weren’t enough to persuade people - it had to be coupled with an improvement in public transport.

If this country ever managed to put in place an integrated transport policy, using the taxes raised from fuel to improve other modes of transport, I’d be far happier about the way petrol has increased in cost. As it is, the Chancellor seems to view the motorist as a cash-cow to be beaten at any opportunity, and does nothing to address any of the problems.

Maybe I’m just bitter. I’m only 27, and I can remember buying petrol for about 30p a litre. What’s it now? 90p? Tripling in 10 years - and Blair can’t blame that on the price of crude.

One last thing from Nadim:

Erm… long live the democratic ideal, eh?

Anyway, it’s half-five. I’m off home - I wonder if I’ll be able to fill up the car on the way back, or if I’m going to have to catch the train tomorrow?

Bryan.

6

Celyn

Apart from the lack of fuel, it is not very similar at all. According to stories in the papers today, the current dispute has overwhelming public support - despite the difficulties.

And also apart from the food shortages and the lack of a burial service and emergency services not being able to answer calls. Apart from that, it is totally different.
I’m currently working away from home, so I’m not driving my own car. My taxi driver yesterday told me that they are planning to start selling rides to the highest bidder when they pickup from the train station - at least until they all run out of fuel.

Russell

7

Thank you all for you’re points, I’m beginning to be swayed, but only slightly. APB and Brian, I’m young(16), idealist and probably vey naive. I really do believe that something can be done to get people on public transport although the current state of affairs is really no incentive.

Perhaps we should actually specific where our tax is going - the French have a system like this, they get given a list along with the pay cheque of what percentage of their income tax is going where, although this could easily show up the holes in government policy when you can see where your money’s meant to be going but no result. Hmmmm.
Some of European couterparts have excellent transport systems but have got into huge debt as a result, although pollution is reduced. Maybe we should have kept the trams - nice and enviromentally friendly.
On re-reading this I realise have made no point, just some musing outloud. Dammit, why is politics all about personal interest? I thought the whole point of the debates in Parliament were to find the best policy for the country not score points of each other.
The worying thing is that all my friends, who will be able to vote next election say their going to vote Tory, because Tony Blair is smug and arrogant and is doing anything about this fuel crisis. Good enough reasons as any but I wish they’d listen to me when I try and reason about policy to them so they can add that into their decision.

A piece of good news, the tankers are supposed to be getting out today. Guess I’ll be off school on Monday then.

8

Have you thought of a bicycle? 10 miles should be well within the capability of a 27 year old. I am 10 years older and do 12.5 miles each way which takes me 45-55 minutes depending on the London traffic - quicker than the tube :smiley:

I know this may sound a bit preachy but it really is a viable alternative for many. It is not as dangerous as many believe and the ride home is often the best bit of the day.

9

An update on my situation. There’s been a protest so lorrys are blocking the centre of town and I might not be able to get home. Maybe I’ll have to stay at school.

10

A groos over simplification, the money from the 8p per litre that you quote, wouldn’t begin to scratch the surface of the problems that afflict the UK’s public Transprot system, the main one being the fact that there isn’t enough of it. Since Beeching ripped up all the rural railways in the 50’s and sold them for scrap, almost all non-urban areas of the UK have been very poorly served by public transport. My own home village a mere 10 miles from Milton Keynes (once europe’s largest shopping centre) has only 2 buses a day serving it!

11

RussellM says, (re. Britain in the 1970s)

“Apart from the lack of fuel, it is not very similar at all. According to stories in the papers today, the current dispute has overwhelming public support - despite the difficulties. And also apart from the food shortages and the lack of a burial service and emergency services not being able to answer calls. Apart from that, it is totally different.”

And also apart from the aqueducts, perhaps?

I don’t know which newpapers you read, but no, I don’t think it does have overwhelming public support. Nor the support of the TGWU (the main transport union). (Still, for a little while, it might give us pedestrians more safety to cross the roads.) There is going to be quite a spin-fest about this, and I fully expect some newpapers to regale us with heart-rending tales of cancelled hospital operations, etc., while others tell us about these good farmers and haulage operators finally making a stand…

It will be interesting to watch Tony Blair’s reactions, though.

12

The point? To stop the government from shoving it up the public sphincter with their nearly 80% government fuel tax.

13

Ticker said:

I have thought about it, and used to do so in a previous job. It’s not so practical now, though: I usually have a few things to ferry back and forth (laptop, for example), I rarely go straight home, anyway (via supermarket, friend’s houses, golf course, whatever), I drive along a motorway to get to work, and to avoid it would add a few miles extra, and, probably most significantly, I’d have to get up earlier!

Okay, I’m lazy. I admit it…

14

I’d vote for an increase in income tax straight away. Direct taxation is fairer in principle than any indirect tax - fuel duty, increased VAT, all of them. However, I wonder if any government can risk making this sort of adjustment. This applies particularly to a (nominally) Labour administration which has fought against the accusation of high taxation of the rich for so long. The fact remains, of course, the money needs to come from somewhere. We can’t complain about the failing state of the xxx without acknowledging we have to pay for it somehow. If it’s not fuel tax, it needs to be something else.

I’ve heard that in some countries there is a claim back scheme operating - where companies like haulage firms, and farmers and so on can claim back duty they have paid on fuel - so effectively they get a lower rate. Does anyone know anything about this and whether this could work over here?

Much as I loathe the unprincipled Tony Blair, it seems unfair that he personally is being blamed for a policy which has its roots long before his time. Yes, it has been a very half hearted attempt to limit road use, but the principle of taxing fuel, particularly leaded fuel, disproportionately, predates this government. “Nearly 80%” tax didn’t appear on the price of fuel overnight in May '97.

And on the subject of union support - does the hypocrisy of the media support for this protest strike anyone else? It occurs to me that if this had been an official union action, the likes of the Daily Mail would have a different slant on the whole thing. Neither can I see William Hague calling the TGWU pickets “fine upstanding citizens”.

15

I was watching the news concerning the crisis in Britain and after hearing that they had an 80 cent per litre fuel tax our 30 cent tax didn’t seem so bad.

Fuel here is presently costing .69 cents a litre or 3.10 Cdn a gallon. Brits pay more than twice as much as we do and pay the highest prices in Europe. They have every right to be really pissed off.

16

I was watching the news concerning the crisis in Britain and after hearing that they had an 80 cent per litre fuel tax our 30 cent tax didn’t seem so bad.

Fuel here is presently costing .69 cents a litre or 3.10 Cdn a gallon. Brits pay more than twice as much as we do and pay the highest prices in Europe. They have every right to be really pissed off.

17

The most surprising thing is that a coalition of truckers, farmers and taxi drivers is now being given some kind of credibility as a group with a valid opinion - I mean, taxi drivers? If you find yourself agreeing with these guys, you know it’s time to reconsider your position.

18

the answer of course is Motorcycles! I’ve been to london a few times and am amazed at how many bikes there are and how well the traffic seems to work with them. I wish I could lane split legally, make it a lot faster to work.

now onto other points of the debate. Public transportation is not always the easiest thing to do. I used to take the train to work, I live 20 mintues from the train and the train then takes 50 minutes to get to my job, plus there is the wait for the train, it usually took 1.5 hours to get to work. now I ride to work, leave the same time, get here in an hour. I use less gas on the bike than a car, and it’s much faster. You just can’t have a train station at every ones front door, I’d like to take the train, but it makes me live by a schedual. if I’m even a minute or two late I can miss the train then have to wait 20-30 mintues for it. plus i have to leave earlier to get to work later! and not by a few minutes, by 30 minutes or more.

What I think they need to do is if they plan on charging so much in taxes they need to use that money to fund research into making better engines.

19

A few posters have suggested that higher fuel prices does not encourage less road use. I’d like to suggest that this is a rather blinkered vision of the first order effects only.

I’m not saying that putting taxes up on fuel directly leads Mr Jones to say that he won’t be making that trip to Tesco this week. However the point here is not so much to reduce road use as to reduce petrol consumption.

Developing more efficient engines is expensive. Developing hybrid engines is expensive. Developing alternative-fuel engines is expensive. Someone has to pay for that expense and it mostly manifests itself as higher prices for low-petrol vehicles.

For example there is new car just on the market in the UK which has broken the record for mpg - averaging about 110mpg on a route around Britain (sorry - can’t afford the time for a cite right now. Perhaps someone can help me out?). This otherwise ordinary family car costs about twice what you’d expect. Who’s going to buy it? Well, no-one if petrol is so cheap that the savings in fuel costs don’t make up for the extra price tag.

However if petrol is expensive then suddenly that extra cost seems worthwhile. Result - a more efficient car replaces a less efficient car and lo! less petrol consumption. A similar argument can be made for other alternative fuels. Petrol consumption has an environmental cost which should in some way be quantified to level the playing field for more ecologically friendly fuels. Consumers will ultimately only buy environmentally friendly when it makes economic sense for them to do so.

[/quote]

I’d like to make another case for high fuel prices, although you may not quite see it as an advantage. For financial types, I give you two words - negative gearing. In other words, consider the following scenarios (not too far from recent events):
[list=1]
Scenario A
[li]Crude costs $10 per barrel. There is no tax.[/li][li]In the space of a year the price of crude trebles.[/li][li]Result: everybody’s petrol costs have trebled.[/li][/list=1]
[list=1]
Scenario B
[li]Crude costs $10 per barrel. Tax on petrol is $30 per barrel.[/li][li]In the space of a year the price of crude trebles.[/li][li]Result: everybody’s petrol costs have increased by 50%[/li][/list=1]

In other words by having a high tax on a volatile product you stabilise its gross price to consumers. Factors of production can then budget more precisely and hopefully planned and actual outputs will end up closer to eachother than would otherwise occur.

[/quote]

To summarise, I say keep the tax - nay increase it. And I say that as a driver who clocks up a reasonable number of miles per year. If the lorry drivers don’t like it then stuff 'em - we should be transporting far more by rail anyway.

Regards,

pan

20

Couldn’t agree more.