Gordon Brown has ruled out cutting fuel duty to ease the impact of soaring oil prices on motorists, stressing on Tuesday that a global response was needed to stabilise crude oil markets.


The chancellor used his Trade Union Congress speech in Brighton to make clear he viewed calls for lower taxes and threats by protesters to blockade refineries and stage motorway go-slows as a diversion from the main problem.

He said: “It is because we understand the problems faced by hauliers, farmers and motorists...that the first action we must take is to tackle the cause of the problem: ensuring concerted global action is taken to bring down world oil prices and to stabilise the market for the long term.”

The Treasury argues that fuel duty comprises a smaller proportion of the forecourt petrol price, which has topped £1 a litre in the wake of hurricane Katrina, than it did during the fuel crisis of five years ago.

Mr Brown is expected to continue to freeze fuel duty in his autumn pre-Budget report, but the protesters threatening action from Wednesday want a bigger gesture from the government.

The chancellor reiterated his view that Opec, the oil producers’ cartel, should bear some responsibility for the rising price of crude and respond immediately by increasing production at its next meeting on September 19 in Vienna.

He stepped up criticism of the oil-producing countries, saying a lack of transparency about the world’s reserves and plans to develop them undermined stability and contributed to speculation in oil markets.

Mr Brown urged Opec countries to use windfall profits from oil sales to invest in new production and refining capacity. The World Bank, he added, should set up a fund to help developing countries invest in alternative energy. Also, the International Monetary Fund should create a new facility to assist countries hit by oil price shocks.

“Oil producers should now agree to use their windfall revenues to create a special trust fund where [they] help debt-ridden poor countries write down their unpayable debts.”

The Treasury’s view that an international response was needed, rather than cuts in domestic duty, was unlikely to change, a senior Whitehall insider suggested.

The government has put in place contingency measures to deal with panic-buying of fuel

Why Brown is still counting the cost of surrendering to the fuel protesters
Anatole Kaletsky



THE DREADED refinery blockades never happened and the panic-stricken queues at petrol stations have vanished as mysteriously as they materialised, but does this mean that Gordon Brown has won his battle with the fuel-tax protesters, to whom he was forced to surrender so cravenly in 2000?



Mr Brown’s decision to suspend the indexation of petrol duties — originally intended as a temporary sop to the protesters, but then repeated annually and now indefinitely extended under threat of another anarchic revolt — was probably the biggest mistake of his political career.

The environmental arguments for higher fuel tax are so familiar they hardly need repeating. The fuel duty encourages people to do things that are good for the economy and society — travel less, use public transport, switch to diesel, drive smaller, more efficient cars. Moreover, and contrary to the propaganda of road-hauliers and farmers, fuel tax has no damaging competitive effects. A trucker’s competitive position cannot by definition be affected by a fuel tax that all his competitors must also pay. If foreign road hauliers fill up in Calais instead of Dover, British drivers can do the same. If British truckers are going out of business, it is because of excess capacity in their industry and cut-price competition from hard-working Eastern European drivers, not because of fuel prices.

As for farmers, whose incomes depend on government-administered prices and subsidies, it is hard to see why anyone should be moved by their complaints. Despite the “crippling” price of fuel for country people, Range Rovers are much more common in the country than they are in cities and few farmers drive Minis or Smart cars. Range Rovers are, of course, indispensable for driving across ploughed fields, but the case for raising fuel duties seems overwhelming as long as Range Rovers continue to race down motorways or crawl through the city centres on school runs.

But the best arguments for raising fuel duties are economic. The first is that oil supplies are managed by a global cartel, which has every incentive to keep driving prices up until they produce a serious fall in oil demand. If governments cut fuel taxes, this just gives Opec more leeway to push prices higher. If, on the other hand, Western governments increase their tax take, the prices received by Arab oil producers (and the fundamentalist charities that they finance) will be correspondingly reduced.

The second economic argument should be even more compelling to Mr Brown. When he capitulated to the 2000 protests, he lost a source of revenue that was almost as fundamental as income tax and VAT to the Treasury’s financial plans. The fuel-tax “escalator”, which did not just index petrol duties but automatically increased them above inflation each year, was arguably the most important single measure introduced by Norman Lamont in his courageous Budget of 1993, which put Britain’s fiscal house in order once and for all after Black Wednesday and paved the way for more than a decade of uninterrupted economic growth.

The escalator was carefully designed by Treasury officials to guarantee a steadily rising stream of revenue and to send an unmistakable signal that the cost of oil would rise inexorably year after year, making long-term investments in fuel economy worthwhile. By the time Mr Brown became Chancellor, the concept that energy was a desirable object of ever-rising taxation was so widely accepted that a doubling of the automatic escalation from 3 to 6 per cent annually in Labour’s first Budget hardly caused a stir. And from 1997 onwards, the escalator did its work as intended — encouraging energy conservation and simultaneously allowing the Labour Government to project a steady improvement in public finances without having to raise other taxes. Then, in that one mad week of road rage in 2000, Mr Brown threw it all away.

The true cost of handing over energy taxation to mob rule cannot be gauged by the £600 million that Mr Brown has sacrificed for the year ahead to buy off the possibility of this week’s disruption. The true losses can be measured from the revenues that would have been raised if the fuel-tax escalator had been left alone. According to calculations by the Institute for Fiscal Studies, the revenue forgone by Mr Brown because of his decision to abandon the escalator comes to a staggering £12 billion this year and steadily rising.

With an extra £12 billion in revenue from fuel tax Mr Brown could, for example, have repaid all the money he took from pension funds in his infamous £5 billion “pensions raid” and still have enough left to cut the standard rate of income tax from 22p to 20p. He could, alternatively, have used part of the money to remain within his public borrowing rules or to maintain the growth of health and education spending beyond 2007, when their present funding plans will run out.

In a sense, of course, this is all water under the bridge. There is no way that Mr Brown or any other Chancellor could now recoup the revenue he threw away in 2000, since that would mean raising fuel tax overnight by 60 per cent. Yet in reality, the benefits of a progressive policy of energy taxation are still there for the taking. The beauty of the fuel-tax escalator lay not in the specific sums it raised, but in the way it guaranteed a steady accumulation of revenue over a long period and simultaneously sent a clear message about ever-rising petrol prices. The steady rise in fuel prices ensured that consumers and businesses took the right decisions on energy conservation, while the guarantee of rising revenues introduced an element of reliability into public finances that Mr Brown has gradually been losing.

It is no coincidence that Mr Brown’s image as the fiscally prudent Iron Chancellor began to tarnish five years ago, at exactly the point when he capitulated to the fuel tax protesters. The price of this surrender, to the economy and to the Chancellor’s reputation, continues to rise every year.

Wot - no response Bogush.

Wot?

It deserves one?

That hasn't already been given?

 

OK, just to keep you happy.

Here's a selection of responses:

 

The environmental arguments for higher fuel tax are so familiar they hardly need repeating.

So why are domestic fuels taxed at 5% innstead of 350%?

Why do buses reclaim their duty?

Why do trains use red diesel?

Why isn't electricity for trams and trains taxed at 350%?

 

The fuel duty encourages people to do things that are good for the economy and society

So why does bLiar fly around the world telling people how green they should be?

And helicopter round the UK

And get chauffeured in a limo with a fleet of protection vehicles and outriders in tow.

To the Houses of Parliament.

A journey that Maggie.

Who actually got blown up by terrorists.

Used to do on foot?

 

And I don't recall 2Jags being called 2Smarts.

No surprises there then!

 

fuel tax has no damaging competitive effects. A trucker’s competitive position cannot by definition be affected by a fuel tax that all his competitors must also pay. If foreign road hauliers fill up in Calais instead of Dover, British drivers can do the same.

Firstly fuel tax is only one disadvantage.

An slave wage driver with a dodgy tacho and dirty truck with a "faulty" speed limiter comes over with tanks brimming with cheap fuel and scoops up a lot of short haul drops on the way back.

And all a local haulier (in, say, Scotland) has to do is go Down to Dover, get a return on the ferry, and fill up in France.

And then drive back.

What planet is he on?

 

As for farmers, whose incomes depend on government-administered prices and subsidies, it is hard to see why anyone should be moved by their complaints.

As for civil servants, whose incomes and pensions depend on government-administered taxes and subsidies, it is hard to see why anyone who has no job security, a crap wage, and no pension, but is paying the taxes to fund those subsidies should be moved by their complaints.

And farmers have to maintain living museums, and provide permanent safe 24 hour access to their workplace.

Does any other industry, anwhere else in the world, have to work under such constraints?

 

 

Despite the “crippling” price of fuel for country people, Range Rovers are much more common in the country than they are in cities and few farmers drive Minis or Smart cars.

I wish people would make up their minds.

One minute no Range Rover ever leaves Chelsea.

The next the country is full of them because they are all owned by farmers.

Actually, if he's ever seen a farm, they usually have clapped out Montegos and the like.

 

Range Rovers are, of course, indispensable for driving across ploughed fields, but the case for raising fuel duties seems overwhelming as long as Range Rovers continue to race down motorways or crawl through the city centres on school runs.

Hardly surprising if they've got to get the kiddies from the farm to the city centre academy (because every school in between has been closed and the playing fields built over)!

But the best arguments for raising fuel duties are economic. The first is that oil supplies are managed by a global cartel, which has every incentive to keep driving prices up until they produce a serious fall in oil demand. If governments cut fuel taxes, this just gives Opec more leeway to push prices higher. If, on the other hand, Western governments increase their tax take, the prices received by Arab oil producers (and the fundamentalist charities that they finance) will be correspondingly reduced.

But Gordy is on target to raise £10 BILLION from North Sea Oil revenues alone!

The second economic argument should be even more compelling to Mr Brown. When he capitulated to the 2000 protests, he lost a source of revenue that was almost as fundamental as income tax and VAT to the Treasury’s financial plans. The fuel-tax “escalator”, which did not just index petrol duties but automatically increased them above inflation each year, was arguably the most important single measure introduced by Norman Lamont in his courageous Budget of 1993, which put Britain’s fiscal house in order once and for all after Black Wednesday and paved the way for more than a decade of uninterrupted economic growth.

The escalator was carefully designed by Treasury officials to guarantee a steadily rising stream of revenue and to send an unmistakable signal that the cost of oil would rise inexorably year after year, making long-term investments in fuel economy worthwhile. By the time Mr Brown became Chancellor, the concept that energy was a desirable object of ever-rising taxation was so widely accepted that a doubling of the automatic escalation from 3 to 6 per cent annually in Labour’s first Budget hardly caused a stir. And from 1997 onwards, the escalator did its work as intended — encouraging energy conservation and simultaneously allowing the Labour Government to project a steady improvement in public finances without having to raise other taxes. Then, in that one mad week of road rage in 2000, Mr Brown threw it all away.

What a load of BOLLOCKS.

The escalator was introduced to gently bring UK fuel duties into line with our EH "partners".

Which they did at about the time Gordy took over the reins.

And started taking the piss.

 

The true cost of handing over energy taxation to mob rule cannot be gauged by the £600 million that Mr Brown has sacrificed for the year ahead to buy off the possibility of this week’s disruption. The true losses can be measured from the revenues that would have been raised if the fuel-tax escalator had been left alone. According to calculations by the Institute for Fiscal Studies, the revenue forgone by Mr Brown because of his decision to abandon the escalator comes to a staggering £12 billion this year and steadily rising.

Errrrrrrrrmmmmmmmmmmmmm

Remember what I said about the North Sea Oil Revenues?

 

With an extra £12 billion in revenue from fuel tax Mr Brown could, for example, have repaid all the money he took from pension funds in his infamous £5 billion “pensions raid” and still have enough left to cut the standard rate of income tax from 22p to 20p. He could, alternatively, have used part of the money to remain within his public borrowing rules or to maintain the growth of health and education spending beyond 2007, when their present funding plans will run out.

Oh, that's alright then:

With the money he could have robbed from the motorists, he could have repaid the money he's robbed from the pensioners.

 

But he'd only hire more civil servants instead.

To do non jobs.

So we might as well keep OUR money!

 

It is no coincidence that Mr Brown’s image as the fiscally prudent Iron Chancellor began to tarnish five years ago, at exactly the point when he capitulated to the fuel tax protesters.

No, it's because people realised he was robbing Peter.

And Paul.

And throwing our money away.

Happy now?

 

-----------------------------------------

 

Wot - no response ?!?!?!?!?

Well, ther's a surprise!!!!!!!!!!

 

Well done 500+ words of meaningless drivel.

At least it kept you occupied and saved you doubling the number of protestors at the refinery.

500+ ?!

Sorry.

I hadn't realised I'd quoted quite so much of your article.

Apologies to my readers.

 

still up to your old tricks boggy? taking chunks of people's postings from other boards and pasting them on your own forum.