Well it’s been widely documented and commented on about the 1p per litre cut in fuel duty and the suspension of the planned 1p + rate of inflation increase.  I have a problem with this.  This will only save the average family £2-4 per month and this could easily be wiped out by the ever-increasing cost of oil, mainly due to the difficulties around the world and so what was the point?

Political

Quite clearly, this was a political attempt at pleasing the mass public, but surely this small “gain” is as some headline writers are suggesting, merely a “drop in the ocean”.  In fact we have seen the extra tax burden being placed on the oil producing companies, who themselves are playing the job loss card on the political seen.

Wouldn’t it have been refreshing if the government had announced a zero cut, but announced more in the way of incentives to drive less or more efficiently.  By actually announcing a cut, I firmly believe that we have sent out the wrong message.

Where’s the all round approach?

It has been obvious for some considerable time that adding tax and duty to fuel has been nothing less than a cash cow for successive governments and little in the way of alternatives have been put forward to reduce our reliance on cars.  I think the public would accept that by paying something approaching £1/litre in tax and duty to the government, they might be “investing” in something for the future.  We should be seeing something like the following list, to actually make a difference.

• Grants to use very efficient vehicles, road tax, capital grants etc
• Mechanisms to drive less
• Incentives to use alternatives, where possible

The last point is also a hot political potato, the government is often accused of looking no further than the dense population of London, which despite having excellent public transport links (although many Londoners might disagree), it is the rest of the country who really struggle with high fuel cost.  This is because in many parts of the country, this is no real alternative and just focusing on a single aspect of the environmental cost of driving is especially painful for rural and less well linked parts of the country.  The use of fuel duty as a way of making driving a choice is far too black and white.  The whole approach may actually need to include a redistribution of the tax and incentives.  So in affect, you should get more in the way of a penalty, if you have a genuine alternative and less of a stick, if you haven’t.

Whilst you could argue, “well don’t live in the middle of nowhere” it is not as simple as that.  The South East and the major cities are already struggling with the demands of the population already.  This would more problems, should it be a major disadvantage to live outside of these communities.

Finally

Without doubt, cutting the duty sent out the wrong message and I fully expect the “give an inch, take a mile” approach to follow.  Just as we start to seriously think about each and every mile we drive, the government gives in (only a little this time).

As usual, I would love to hear your thoughts on this.

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