London, (Parliament Politics Magazine) – It’s time for our elected national politics to recognise that cutting Fuel Duty is a key strategic component to easing the cost-of-living crisis and thus vital to reducing inflation. It’s a powerful deflationary tool, and at the stroke of the Chancellor’s pen its positive fiscal effect is both immediate and substantial.
Since 2010, I have been campaigning unremittingly for our nation’s perennially high taxed drivers, with the redoubtable MP, Robert Halfon. Working very closely together we have been largely responsible for a decade’s long freeze in Fuel Duty right up until the Spring Statement in March, when a welcome and unexpected 5p cut, we lobbied hard for, was announced by Rishi Sunak.
But here’s the thing, that fall in one of the highest fuel levies in the world, was not noticed. It didn’t touch the sides. It was undeniably great news, that Business Minister Kwasi Kwarteng ordered the (CMA) Competitions and Market Authority to find out why this tax cut was not seen at the pumps. But yet again just like the previous enquiry into the fuel supply chain back in 2013, this one seems to be a whitewash too. The CMA have concluded that the 5p fuel levy reduction did indeed appear to have been reflected in pump prices. How they came to that conclusion is something out of a Hans Christian Anderson’s fairy tale!
Frankly, I believe the CMA is not fit for purpose. It’s clear they have not interviewed the key stakeholders, the key witnesses in whole petrol and diesel filling up process, namely drivers. Nor have they analysed the data that shows, very little of that tax cut hit the pumps. The RAC said the 5p cut only took prices “back to where they were just a week before the Spring Statement.” The cut in duty was widely leaked and rumours of pump prices rising before the Spring Statement in readiness to a tax cut were rife. On further follow up analysis the RAC suggested just 2p was in fact, passed onto the forecourts.” Who the hell, are we to believe?
The only good news from CMA’s latest ineffective investigation is that “a review of competition in the road fuel market has found cause for concern in the growing gap between the price of crude oil when it enters refineries, and the wholesale price when it leaves refineries as petrol or diesel.” Well, you could knock me down with a feather. At FairFuelUK we have been shouting such scurrilous business practice has been happening for years.
In the meantime, as the CMA wakes up to reality, what every driver will tell them, if ever asked, for years there has been opportunistic profiteering and worse still, the Government allows it to go ahead totally unchecked. Oh, I nearly forgot they are wallowing in billions of extra VAT due to these record petrol and diesel prices.
Of the two potential MPs to be the next leader of the Conservative Party and, of course, our country, it is unclear which will be the best advocate for UK’s 37m drivers. Almost as indistinguishable as to what the cost of filling up will be, when global oil prices fluctuate.
It’s staring them and the Treasury in their proverbial faces. We need to follow Germany’s lead in this cost of living crisis and cut Fuel Duty big and Our European friend has reduced their fuel tax by 25p per litres. The French by 13p, Ireland 17p and Spain 20p too. Germany’s inflation as a result has fallen to 7.6%.
Diesel, the commercial heartbeat of any economy, here in the UK is now 28p more expensive than Germany and France, 31p higher than Italy, 29p more than Spain and a staggering 61p more than Poland. Go figure.
So our two big solutions, to increasing consumer spending, helping the hard pressed logistics businesses, the continuing viability of small firms and most importantly, reducing inflation, are to cut Fuel Duty by at least 20p and to implement a pump pricing regulatory body, we call PumpWatch, to ensure that any substantial tax cut reaches the forecourts. These are not pipe dream fantasy requests. They are the economic liberators of UK Plc and a way to give low to middle income families, some hope.
The brilliant economic brains at the CEBR and even a statement in 2014 from the Treasury clearly demonstrated lower Fuel Duty, is good for GDP, wages and business investment. Bewilderingly, in 2011 the Tories had no plans to scrap Gordon Brown’s punitive draconian taxation escalator strategy until FairFuelUK was born, strengthened by the prodigious political lobbying efforts of Robert Halfon MP in Westminster.
And here is yet more proof why we need that way overdue PumpWatch. In the 7-week period from June 1st filling up with petrol rose by 13p yet the wholesale price fell 28p. If the CMA doesn’t recognise these figures from RAC Foundation’s data, then what are they looking at? It’s so much more than looking where Rishi’s miniscule 5p cut had been hidden. The big, branded oil firms and wholesalers in the fuel supply chain have been allowed to go unchecked for far too long. Time for an unfettered probe!
I have spoken with Liz Truss if she will adopt our popular solutions. Her response was inevitably equivocal, but she assured me they will be considered carefully in her emergency Budget if she wins. She has agreed to cut taxes, reverse planned Corporation Tax hikes, recent National Insurance rises and remove green levies.
According to Bloomberg, Rishi Sunak favours more green taxes being added to petrol and diesel prices, and we all know, that other tax cuts are not likely, if he is elected as our Prime Minister.
So, the signs for drivers are still hanging in the balance as to any Government interventions to reduce these punishing pump prices. The leadership election is delaying any tangible help, similar to what has been enacted in most European states. We can only hope that the next PM also wakes up to the painful reality of the cost of filling our tanks. The nation remains in economic torpor.
Background: Howard Cox.
He is a Public Affairs Campaigner, who founded FairFuelUK. Fighting for fairer taxation & treatment for UK motorists, van drivers, hauliers & motor-bikers. Since 2010 FairFuelUK has saved drivers over £160bn in planned tax hikes in duty and VAT through constructive and objective campaigning. FairFuelUK is the real independent and not for profit voice in Westminster for 37m UK drivers. Drivers that all want clean air and the safest of roads, but want these accomplished without being demonised for all the planet’s environmental ills or continually treated as easy cash cows. As well as fuel taxation, other issues addressed by the FairFuelUK that impact on drivers, have included congestion charges, ULEZ/CAZs, parking costs, roads inve…