Oct 01 2007
The great petrol rip off
Gordon Brown is taking your money again. Today we are told by the BBC that total tax on a litre of petrol has risen to a massive 65 pence, (around ??3 a gallon in tax) compared with the 33 pence needed to pay for exploration, production, transport, refining and retailing of the fuel. It’s high time the petrol companies put the tax on the bill and on the pump price so all could see the extent of the great fuel rip off. Some people think high fuel prices are about the policies of oil companies - in the UK they are about a greedy government.
It would be easier to accept if the money was being well spent, but I fear it goes to more spin doctors, more ID cards, more regional government, more regulations and more bureaucracy. I don’t suppose we will see better roads and more trains for our money to cut the congestion which causes so much of the pollution. It is a tribute to this government’s incompetence that at a time when they are putting through such a large tax increase as 2p on every litre of petrol bought, they are busily closing hospital facilities and ushering in a period of restraint in some types of public spending.
Nor does all this tax stop people using the car, the van or the lorry. There is a simple reason. They have no choice. There aren’t enough trains to take the strain, and so often the only practical way of getting yourself and your goods to work and to market is to go by road. People do need to get the children to school, themselves to their employment, and do need to pick up the family shopping from the supermarket. They are not being wicked doing this by car - it is often the only way. Give us a break Gordon. Why not cut out a bit of the bureaucracy you have spawned during your ten years in power instead of taking more of our money. The manufacturing sector has to do things better and more cheaply each year - couldn’t government try that as well?
John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
John, I understand that it is actually ILLEGAL to mark up the tax take on each litre separately.
I have a theory that this is why the measure petrol is sold in was changed - 2 p per litre extra tax sounds faily harmless, while the actual NINE PENCE per gallon, if we but knew it, would lead to mass protest.
Alan Douglas
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I would need to know which law - if it is illegal then we should change the law. I cannot see how it could be illegal to put the tax on the bill.
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[...] John Redwood on why today’s addition of 2p per litre on fuel tax will make no difference to the environment because people will continue to use there cars, trucks and motorbikes (my emphasis): “They have no choice. There aren’t enough trains to take the strain, and so often the only practical way of getting yourself and your goods to work and to market is to go by road. People do need to get the children to school, themselves to their employment, and do need to pick up the family shopping from the supermarket. They are not being wicked doing this by car - it is often the only way.” [...]
As I understand it, the chancellor has had a bit of a windfall in the loss of value of the $US as oil, including North Sea oil is traded in $US. This means his oil reserves have rocketed in value as the oil price went up and the $US fell in value against the GB
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Your idea about splitting the tax take from the price is brilliant. If this is illegal then I would really want to know the rationale behind the law.
I have suggested on my blog “how about a sticker campaign at all garages putting stickers proclaiming the amount per litre that goes to the Treasury compared to the retailer etc. Since a litre of unleaded is all but
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While I agree that many people do need to travel by road - and when I have been faced with the choice of 2 hours by public transport or 30 minutes by car, I’ll choose my car.
However, a lot of people do take needless journeys (e.g. driving the kids 1/2 mile to school, or driving to the local corner shop etc etc). Perhaps the price increase will make them think again - and walk - which will do them and the environment some good.
Oil is a finite resource and will run out eventually - so as a nation we have to find alternatives… and if high petrol prices are a means to making something like electric cars economic, then so be it.
David.
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“It would be easier to accept if the money was being well spent, but I fear it goes to more spin doctors, more ID cards, more regional government, more regulations and more bureaucracy.”
I totally agree. However, if the size of government was to be reduced (reduction to 10% of GDP if I was dictator) I would reduce income, business and VAT taxes before fuel taxes.
Taxing fuel does not discourage hard work and it reduces fuel consumption and thus our reliance on foreign oil producers. Taxing fuel, and then relying on market mechanisms, will enable uk citizens to choose the most effiecent way of reducing fuel consumption. These taxes often take years to have a real effect on the market. If Margaret Thatcher didn’t start the fuel price escalator then the average size of car engines on Bristish roads would be nearer 3 litres. And with the Labour governments lack of investment in roads, I would hate to think of the congestion levels.
Reply: I would rather cut the income and capital taxes I have identified than cut petrol tax. Indeed, I did not propose any such cut in petrol tax, but I do think we should highlight and criticise this latest hike, given that much of the money he collects from it is likely to be wasted.
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Alan Douglas: “I understand that it is actually ILLEGAL to mark up the tax take on each litre separately.”
That was my understanding as well. I think it the case for VAT too, certanly there are exceptions to the VAT requirements, for example, IT kit can be advertised both pre and post VAT prices.
For everything else VAT and excise duty must be hidden. That is the way the government likes it.
If every time the government started the “the GREEDY OIL COMPANIES” scare running, if someone turned around and said “yes the price of Oil has increased, but you still pay more to the government for something intangible, than you do to the oil companies who as you point out, actually do something useful.
Repkly: Can someone tell me which law makes it illegal to tell people how much tax they are paying - so I can campaign to change it if it really exists!
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JR:
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You sound like you guys would like some advice on consumer protection and weights and measures legislation, I’ll do my best. This is only my opinion and only the courts can interpret the law.
It is very difficult for me to research this because parliament have a habit of amending existing laws using statutory instruments and you need to subscribe to a specialist service to read laws ‘as ammended’, the ‘Office of Public Sector Information’ website is a completely unreliable way to obtain information about the laws that govern us as we have no way of knowing if they have been ammended.
The is also the ramification of the
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“For everything else VAT and excise duty must be hidden. That is the way the government likes it.” (APL)
It’s usually itemised on receipts. You have to have a level playing field. You can’t have one lot of business quoting ex-VAT and one plus-VAT, it distorts fair price competition.
As a rule of thumb if you are offering things for sale to consumers you must quote including VAT, you can quote both if you want to, usually if you are are marketing to businesses and consumer (hence your IT example).
there are masses and masses of rules, regulations, order and codes of practice on price marking, none to my knowledge say that you can’t itemise tax on receipts. In fact there is no law that says you have to give a receipt.
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And just to set matters straight I have emailed my mate who is a trading standards officer to find out what the ‘Price Marking (Petrol) Order 1980 as amended’ is. I’ll let you all know as soon as I can.
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I think taxing spending is prefereable to taxing income, so I have no real problem with petrol duty. VAT on heating bills however I do think is unacceptable, without heat, you die. With transport, we do have the option to walk/cycle.
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StevenL: “It’s usually itemised on receipts. You have to have a level playing field. You can’t have one lot of business quoting ex-VAT and one plus-VAT, it distorts fair price competition.”
Anyone who has visited the US, will know that prices are (mostly) marked excluding state or federal taxes. Any customer not familiar with this practice is often given an unpleasant ‘jog’ when paying for items at the checkout when tax is added.
Yes, one might claim it to be a reasonable ‘consumer protection measure’ but it does not hurt the consumer to be constantly reminded exactly how much (s)he is paying to the government. I think that regular reminder, and minor inconvienience is worth the extra hastle if people are continiously reminded of just how much “big” government costs all of us.
JR: “When Parliament is back I will do that if there is any reason to believe it is illegal.”
Thank you. Do you agree this topic does rather illustrate the thicket of laws and regulations that somebody who simply wants to live a law abiding life needs to know about in order to do so, and if (s)he is trying to run a buisness too, it must be almost impossible to do.
Ignorance of the law maybe no defence. But the flip side of of that ought to be that the law is clear and reasonably understandable.
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“Reply: I can’t see how it could be illegal for a petrol retailer to put on the pump below the approved current price display a statement along the lines of You may be pleased to know that two thirds of your payment is going to the government, not to the petrol company
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“Anyone who has visited the US, will know that prices are (mostly) marked excluding state or federal taxes. Any customer not familiar with this practice is often given an unpleasant
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“I wonder what the manufacturers of the pumps would make of this? What about their customers. Can John Redwood MP and his likemindeds create enough consumer demand for this?”
What a silly thing of me to have said, I just re-read your comment.
I can’t see how it would be illegal for retailers to point out the tax-take by form of a sticker either as long as it was not misleading the consumer regarding what they were paying for.
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My latest diesel receipt states TOTAL
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I test drove one of those Mazda6 turbo-diesels today. It was surprisingly quick. First time I’ve driven one of these modern turbo-diesels. I had the 1.8 petrol model as a hire car once.
I’ve heard that the French consumer has a better financial incentive to buy diesel cars than the British consumer, thus reducing fuel usage and carbon emissions.
You see the British consumer can buy the 1.8 petrol and have a nice raspy exhaust note and a bit of nip and a more pleasurable overtaking/twisty A road experience when you take it over 4,500rpm in 3rd gear and save a couple of grand on the price tag over the diesel that will save you 5-10mpg at the pumps.
The French consumer apparently gets a reduction in fuel duty for choosing the more fuel-efficient diesel, which I guess would raise demand for diesels even more and keep used prices even higher, but reduce UK carbon emissions and fuel consumption.
Reply: I drive a fuel efficient diesel and would love to pay lower diesel taxes on the fuel. I agree that we should be looking at ways of encouraging more fuel efficiency instead of taxing people more.
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I went and looked at more cars today as a typical 27 year old UK consumer.
I looked at
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Could you tell us John how a Tory Transport policy would include motorbikes? Less polution no traffic jams etc
I myself own a Suzuki GSXR 1300 Hayabusa. 175 bhp, 200 mph, 35 mpg. About eight grand. Bargin! I suppose all you freedom loving Tories would love to see that banned. To much fun.
Reply: What would you like our policy to say about motorbikes? - we say a great deal about improving roads and junctions to increase capacity which will help motorbikes as well as cars.
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‘I think taxing spending is prefereable to taxing income, so I have no real problem with petrol duty. VAT on heating bills however I do think is unacceptable, without heat, you die. With transport, we do have the option to walk/cycle.’
Nice one Dave! How much do you earn? More than average for sure.
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