Will Cameron have a Brown moment over petrol?
Peter Hoskin 9:37am
Remember when Gordon Brown came up against Fern Britton in a TV interview? I've pasted the video above to remind CoffeeHousers of two persistent truths: how tricky a subject petrol costs can be for a serving Prime Minister (watch on from around the 0:50 mark), and how Labour are hardly blameless when it comes to the current cost of fuel. As Britton asks in the interview, "How much tax do you put on the fuel?" And the answer that Brown mumbled to avoid, from a House of Commons briefing note at the time, was this:
In other words, for a huge portion of the New Labour years, fuel duty accounted for over half of the petrol price at the pumps. For a typical litre of fuel, duty was 36.86 pence when Labour came to
power, and 57.19 pence when they left. The fuel duty hikes that the coalition are planning were pencilled in by Alastair Darling.
Funny how Ed Balls doesn't mention any of this in his article for the Sun today, a
follow-up to his interview with yesterday's Sunday Times. Instead, he offers four prescriptions for the government:
But while there's a brazenness to Balls' attack, you can't really blame him for trying. It's his prerogative as an Opposition politician to exploit issues to the government's discomfort – and, as I wrote yesterday, this one is dynamite. If you want a sense of how dangerous the numbers are for the government, then consider this: we now have one of the highest petrol prices in all Europe. Here's the graph:"While he gave banks a tax cut compared to last year, they are now going to pay £800million more than this Government was planning. He should use the extra money to reverse the VAT rise on petrol.Secondly, he should look at April's annual fuel duty rise. Labour often postponed planned duty rises when world oil prices were rising.
Thirdly, he must work with finance ministers globally to keep the oil supply flowing and get prices down.
Finally, he must get our economy moving and get more people in work and paying taxes."
The price in the US, by the way, is 51.16 pence a litre.
The government will still only say that it is "considering" a fuel duty stabiliser to counteract the price rises. But I have little doubt that there will be some measure or other in the Budget – if only a postponement of the planned 1p hike in duty. This, as New Labour and Gordon Brown demonstrated all too well, is a toxic area for politicians. Ed Balls is making the most of it. David Cameron, for his part, should avoid being interviewed by Fern Britton.
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Chris lancashire
February 28th, 2011 9:46am Report this commentFor those who want Cameron and the Coalition out this video is timely reminder of what it was like with this dissembling buffoon in charge.
R.McGeddon
February 28th, 2011 9:52am Report this comment@Chris lancashire: Indeed and the chimeric two Eds ( Balls and Miliband ) are Gordon's proteges and tutees.
Hugh Janus
February 28th, 2011 9:56am Report this commentSorry, is there a transcript somewhere? I simply cannot watch this madman, this economy-wrecker, this bully-boy without experiencing unusual urges to destroy the TV.
Peter Maxwell
February 28th, 2011 9:57am Report this commentThe truth behind the fuel duty is that when introduced by Ken Clarke in 1993 it was done so "to help reduce emissions in the line with the UN climate Changer Convention". In other words it is a climate change tax. As the global warming hypothesis is now in tatters, and the continuation of such a punitive tax on an already fragile economy is unhelpful to say the least, it would be honest of this Government to get rid of this tax in its entirety.
Liberty
February 28th, 2011 10:21am Report this commentBrown and presumably Balls colluded to keep interest rates below market rates for much of their term in office whilst banks charged market rates and were allowed to keep the difference as profit which was used as collateral for house loans that could only be repaid if the houses kept rising faster than inflation [a bubble formed] which the bankers knew would burst but also knew that when it did Brown would bail them out by QE, loans, taxes, etc which is what he did.
Brown was intelligent enough to know all this but as his only experience of economics was to write a guide for the workshy on how to live of the taxpayer which is what he put into practice all his political career but with lots more naughts on the end.
TrevorsDen
February 28th, 2011 10:29am Report this commentThe govt desperately need the money so the tax will stay - I think the increase should be delayed and if prices persist then it should be scrapped.
I support a stabaliser but wonder if it can sensibly be introduced in practice
Pot Head
February 28th, 2011 11:05am Report this commentI reckon Hammond's idea to raise motorway speed limits to 80 MPH is a stealth tax, while pretending to be a friend of the motorist - at 80 you use 20% more fuel.
Fuel is good thing to tax, we have choice in how much tax we decide to pay, by how much we drive and what car we drive in. Not a choice given to us by taxes on income.
Drive less in a more fuel efficient vehicle and get a tax cut- Simples!
In2minds
February 28th, 2011 11:30am Report this comment@Peter Maxwell - February 28th, 2011 9:57am -
Steady on, do be careful! It is not possible to be critical of Ken Clarke on this blog. He is after all the finest Tory Minister since records began. Hence your comment about the fuel duty -
"it would be honest of this Government to get rid of this tax in its entirety"
is awkward in that some readers might misunderstand the separation between tax and man.
tb
February 28th, 2011 11:35am Report this commentI doubt a stabilizer will work. Price fixing never does.
A Sensible move would be to remove VAT entirely then any price movements aren't exaggerated. The money will then stay in the real economy which would be a good thing for the UK.
EC
February 28th, 2011 11:41am Report this commentChris lancashire, February 28th, 2011 9:46am
Good point. I couldn't watch the video. As soon as he started talking I had to switch it off.
With the financial situation as it was Cameron & Co were totally f*cked before they started. He should have gone it alone and then called another election. I can see why using the LibDems as a human shield looked like an attractive proposition but he's well and truly lumbered with them now.
Olaf
February 28th, 2011 11:57am Report this commentThe fuel duty might have introduced as a green tax but like all taxes Governments get addicted to them. More tax mean they can do more 'stuff' and 'stuff' get in the press and they get headlines and lauded for that 'stuff'.
For the rest of us being punished for having the temerity to work the price of fuel is a pain that is felt every day that impacts on almost everything you do.
When you're paying 140p a litre quite frankly you can't give a f^ck about what the green agenda is. And a moralising PM p|ssing any spare cash into the Indian space program whilst being whisked around in a subsidised Jag from subsidised metropolitan building to metropolitan building doesn't make me care any more about it.
strapworld
February 28th, 2011 12:43pm Report this commentMr Lancashire wants second best. Fair enough that is his choice. But just remember what Cameron and wee Georgie promised what they would do about the price of fuel. Yet another broken promise.
Yet the rise in fuel will put prices up in the shops. Transport firms may well go broke, more people on the dole.
When, as Peter Maxwell points out, the extra tax was introduced because of Global warming, sorry Climate Change. That total nonsense created to frighten the masses.
But will Cameron go against his buddies in the EU and cancel this punitive tax? Of course not.
It was the Conservative Government that brought in the 70mph limit because of the fuel crisis. They will not increase the speed limit they will reduce it to 60mph. More revenue from speeding motorists.
But let us forget that because we have a second rate prime minister.
Fergus Pickering
February 28th, 2011 1:00pm Report this commentDrive less, Pot Head. How do you get to bleeding work then? Most people's driving isn't for pleasure, you know.
an ex-tory voter
February 28th, 2011 1:10pm Report this comment@ strapworld
The real problem is that not only do we have a second-rate Prime Minister we have a second-rate political class. David Cameron may not be up to much in the leadership stakes, but does anyone visibly tower above him?
TomTom
February 28th, 2011 1:18pm Report this commentIn 1997 petrol was c. 54pence/litre. In France the petrol price INCLUDES Road Fund Licence which is not factored into price comparisons here
Pot Head
February 28th, 2011 1:20pm Report this commentFergus Pickering- I bet loads of people could drive considerably less, and most could choose a more fuel efficient car, and everyone could slow down.. If only it was so easy to get a tax cut on your earnings instead of your consumption.
Chris lancashire
February 28th, 2011 1:33pm Report this commentstrapworld: So I've settled for second best. Was there another choice?
yank
February 28th, 2011 1:57pm Report this commentNice, concise comment string here.
The global warming charade is ruse for a revenue grab, as we should all know by now. When politicians jump foursquare into scientific theory, politicians being people who are broadly so technically illiterate I'd be surprised if they could pass high school algebra in most cases, then you know there must be an ulterior motive. There was and is.
Once in place, the revenue grab is nearly immortal.
What's new is additional VAT, an immediate compounding of price increases. I don't blame Mr. Balls for attacking here. He does the nation a service.
But the economic game changer for the Cameroons would be to abandon the global warming theology. When your opposition starts yammering about "cost of living crisis", you mustn't stand there shivering like a useless marketeering git, caught in a spotlight... you see them and raise them.
You piggyback on their words and rhetoric. You leverage them and what they're saying. That's what you do if you're about leadership:
"Yes, there is a 'cost of living crisis', as the honorable gentleman rightly points out. We here announce the means to address this crisis directly, by remediating the crushing burden that a certain non-crisis has placed upon them.".
Tanuki
February 28th, 2011 2:14pm Report this commentYes, the price of fuel is obscene. Yes, we pay VAT on the fuel-duty (hence it's double-taxation).
Cameron could at least order his Chancellor to stop the double-taxation bit. Or alternatively to "Harmonize" VAT on road-fuels with VAT on heating-fuels. Let's face it, a litre of '28-second' central-heating-oil and a litre of diesel are chemically the same - so why tax them differently?
Olaf
February 28th, 2011 2:53pm Report this comment@Pot Head. Spoken like a true city dweller. Come out to the country where there are no buses or trains. Most of us can't drive any less and still get to work. Change my car, OMG why didn't I think of that. Except 20% VAT on cars make changing to a new one a rather expensive undertaking and spare cash at the moment is being taken up by high energy prices and despite the supposed record low interest rates credit for a car is remarkably high. This Government and the previous one has engineered the average worker into a pretty favourable position for itself. Stuck with cars and houses we pay a fortune to run and tax but too poor to change to anything else.
Bob
February 28th, 2011 4:38pm Report this commentWere it not for the Euro, we would be saying "how many Francs/DM to the pound?". Devalued Sterling, even if not as bad as it has been, has made other countries' fuel, wine, indeed everything more expensive than it was. Take 20%-30% off their prices for a better comparison, then we're the most expensive. Anyone arguing that is the exchange rate today so does not matter must then accept the UK has taken an international pay cut. Same mess, different perspective.
Marcher Baron
February 28th, 2011 10:19pm Report this commentFor those of us who live and work in rural areas, driving less isn't an option. There really is no alternative. VAT on top of duty is iniquitous; it's a tax on a tax. What I find particularly galling is that fuel tax is a so-called "green" tax, especially since the science is far from settled.
Tarka the Rotter
February 28th, 2011 11:10pm Report this commentOh what utter bollocks! Try living and working in a county like North Yorkshire and driving less...you'd be stuffed. There IS no alternative, get real!
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