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Fuel Duty and the OFT: Forcing us to pay more and more Tax on the essentials of daily life demonstrates just how far apart our Westminster politicians are from life outside and the reality of being British today

February 1, 2013 Leave a comment

This week’s announcement by the OFT that the UK petrol market is working well had fudge written all over it and was unsurprisingly met with disdain by motoring organisations across the Country. But just how much does the Government response tell us about the missed opportunities that they could have used to help us, rather than simply using a clever play on words which completely ignores the elephant in the room?

Fuel Duty is of course nothing new where inflammatory issues are concerned. Since the Fuel blockade in 2000, the presence of the Fuel Price Escalator has become only too well known for its wholly disproportionate use as a revenue raising device for successive Governments who have failed to address almost every issue concerning overspending at its root cause.

Use of Fuel Duty in this way has been counterproductive for many years. Whilst making already stretched household budgets even harder to manage for those who have little choice but to use a car to commute, its impact on the all-too-tightly-margined logistics industry reaches into almost every part of our daily lives through the cost of the delivery and supply chains of products that we buy and use each day.

Taxing a product which is effectively the lifeblood of the Country so heavily, just because it is easy to do so is not only morally wrong; it demonstrates just how far detached from reality and void of understanding our politicians have become to the issues facing the Electorate and how desperate we actually are for Government that sees 5 years as an opportunity to do something, rather than the time it takes to work at little more than getting re-elected.

The UK Taxation and Benefits system is far too complicated to understand in almost every place that our lives touch it, and it is little wonder that an entire industry exists to assists to help those who have money to avoid paying every penny that they legally don’t have to.

Worse still are the plethora of revenue-raising taxes which have been put in place on virtually every item that we buy apart from the very minimum of bare essentials. This travesty makes the inability of our leaders to tackle the root causes of the Nations financial difficulties all the more serious when market manipulation and unscrupulous profiteering by the City and its Funds comes ever closer to pushing more and more families into the state of extreme poverty, when none should even be there in 21st Century Great Britain.

In 2007 and as a new Councillor, I argued on the Conservative Home Website that the then Labour Government should consider giving the Logistics Industry the same concession as Agriculture and remove Duty from Fuel.

As just an interim measure, I have no doubt that the impact from such a move would even now have massively positive implications for businesses and the prices of goods. I myself have been in that very situation where a contract has been negotiated which allows haulage prices to be tied and raised directly in line with fuel costs and it is no easy task when those costs will be passed directly to the end user price of the goods carried. But duty-free fuel at an industry-specific level itself would not go anywhere near far enough and attempted in isolation – the method classically used by Governments as an excuse not to do something – it would simply create more deficit of the kind that as a Country we can already not afford to sustain.

Tackling the disenfranchisement caused by our system of Taxation is no mean feat. But the simplification and application of our Tax system in ways that basically make sense to us all, without being left having the inherent feeling that those who give will always be asked to keep giving more has now become essential.

In order to do this, Government will have no option but to adopt and embrace a new and holistic form of politics which uses balance and fairness across all policy areas as the benchmark. It could then more readily face difficult decisions today for a better tomorrow, implementing systems such as a Flat Tax, which at its worst would be relative to income and expenditure, and at its best would be universally fair, proportional and easy for us all to understand.

Cheap political capital is of course made off the back of what each and every one of us does or doesn’t earn and possess. But forcing us to pay more and more Tax on the essentials of daily life, whilst at the same time telling us that the system is fair, not only smacks of a Government treating the Electorate like fools; it demonstrates just how far apart our Westminster politicians are from life outside and the reality of being British today.

Rail fare hikes and tough talk on welfare waste: Today’s problems will not simply be solved by continually taking more from pockets when there is even less to replace it.

January 2, 2013 1 comment

With a 4.2% average rise in ticket prices hitting rail commuters today, just how long do politicians think that rises in the cost of essential services, utilities and products will remain ‘sustainable’?

Stories such as this one and also the attack on welfare payouts by Iain Duncan Smith in just the past two days alone demonstrate just how little emphasis there really is in dealing with the root causes of problems, which may be unpalatable to those in power, but are nonetheless very real indeed.

As a businessman with both conservative and capitalist principles, I have enthusiastically embraced the opportunity to be both enterprising and entrepreneurial throughout my career. However, I also learned very early on that there are basic laws at work within business, one of which is that costs will generally be fixed, but profit will always be variable.

Where this goes wrong in the economy is in situations where those in control of businesses are able to fix minimum profit margins and then seek the cost of investment and renewal through price hikes which usually only affect people and other businesses who themselves have no ability to raise their own incomes or margins to cover those very same costs.

Those reading this who have experience of the commercial sector in its broadest sense will know that the circumstances which generally allow this darker side of capitalism to thrive, only exist within monopolies or within industries which provide services or products which people must have; many of which were once in public hands.

The history which has given privately owned businesses the ability to dictate the ‘breadline’ or to become able to ‘profit in misery’ is a long one. Profligate spending by idealistic politicians who believe in the principle of something for nothing, simply created a situation which left others with a more realistic understanding of the way that an economy really works with little choice in the way they had to respond.

The age of privatisation was soon born and responsibility for its evolution cannot be levelled at the door of any one Conservative, Labour or Coalition Government, as all have played their part since the 1960’s.

What can equally be said is that no one person who can ask for the votes of many thousands of people, can reasonably expect to retain any sense of respect as an MP if they have accepted that responsibility and then failed both to recognise and then to act upon the damage and pain that such levels of power are causing in the wrong hands.

Yes we need travel fares that make a job worth travelling for. Yes we need reform of welfare, benefits and taxation so that there is an incentive for all to work and stay in this Country. Yes we need managed investment in just about every area of life and infrastructure that we could conceivably imagine.

But we also need Government which is responsible, confident in taking risks and ready to deliver reforms which may well include legislative restructuring of businesses offering essential services in order to limit what they actually make.

The failure of Government to ensure and safeguard basic costs for independent living is a root cause of many of today’s problems and will not simply be solved by continually taking more from pockets when there is even less to replace it.

Toll Motorways: No Government can continue to charge the Taxpayer time and again for the same things and expect to be taken seriously.

December 22, 2012 Leave a comment

Latest headlines suggest that the DFT is now open to the idea of privatising new roads, and George Osborne is also now considering charging tolls for existing Motorway use too.

Perhaps many of us are mistaken, but don’t we already pay for this in ways such as Road Fund License, Fuel Tax, Vat on vehicle purchases, Vat on Fuel, Vat on vehicle repairs, Vat on Tyres, Corporation Tax on Companies providing the same etc, etc??? To be fair, the list probably goes on a great deal further; and that is about the only great deal that the Taxpayer and businesses seem to get when it comes to road use and transport.

One of the most significant tragedies and missed opportunities of this Coalition Government was the given acceptance on the part of so many of us that the Country’s finances are in a hell of a mess and that we had been fully accepting of the need to implement changes and policies which would have absolutely smashed the age of political correctness that is wrapped around and protects so many of the root causes of our problems. Changes and policies that if implemented, would easily have began to address the real problems which a post 2015 Government may well try to cover up with yet another return to profligate spending.

Few people or businesses can exist or move forward in the UK today without transport and therefore road use entering in to the mix at some point. The financial burden which accompanies road use is already arguably higher than is sustainable. So simply loading further charges on users who cannot earn more or charge more, when every other cost continues around them continues to rise, is simply outrageous.

Before anything else, existing Motorways require better management. Today’s technology may well allow for every vehicle to be ‘chipped’ and for road space to be allocated to keep overcrowded roads moving, whilst purpose-specific taxation is generated on a per mile basis. But such moves simply cannot be adopted as a method of raising additional fees and would have to replace or consolidate existing systems which do not fairly reflect levels of use and do not intelligently support the growth and competitivenness of British business.

Privately built and operated toll roads may themselves bring a timely solution to the hole in funds for new infrastructure, but will again ultimately allow profit to be made from essential services and functions for public use, where focus on the bottom line will only ever lead to even greater problems for the end user.

Top to bottom reform of all areas of Government, Benefits and Taxation are the only way that the true depth of this Country’s problems can ever be addressed and finding politically expedient ways of reducing the thin layer of jam between the bread in the Taxpayer’s sandwich may solve a problem today, but will leave the whole thing tasting rather sour tomorrow.

Politicians must now accept that you cannot charge the Taxpayer time and again for the same things and expect to be taken seriously.

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