Why can't petrol tax be reduced as an emergency measure?

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ukbot-nicolabot@reddit

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ActionBirbie@reddit

It can, and it may well be at some point, depending on how long it goes on for.

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Nubian_hurricane7@reddit

They also need to ensure that mechanisms are in place for it to be passed on to the consumer because the supermarkets just pocketed the difference

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MaizeGlittering6163@reddit

What government spending would you cut to fund this?

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Hot-Efficiency7190@reddit

It can be done cost neutral if cutting VAT as oil prices rise to maintain a levelish price. Government can do this easily, VAT can be amended overnight every night as it is done on budget day.

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Jo3Pizza22@reddit

At the very least they could just reduce it by the amount of extra VAT income that they are receiving as a result of the higher prices. That would be about 2-3 pence per litre at current prices, and does not reduce the amount of tax income that the government receives from fuel sales compared to the pre-Iran war prices.

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ArmouredFlump@reddit

But you're forgetting that government costs have also increased as part of this crisis. Fleet vehicles cost a fortune and I'm not talking about MP's limos but Environment Agency 4x4's, housing repair fleets and bin lorries. All of those things are now costing way more to run.

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Anony_mouse202@reddit

Means test the state pension and scrap the triple lock

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catmadwoman@reddit

I'm one of those pensioners and I couldn't agree more. If there are that many rich pensioners who don't need their government pension then means test them. Although I recently heard on a TV debate that it costs more to means test ANYTHING than the amount saved.

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Scared_Cricket3265@reddit

I think that is the most concerning thing in the debate. Why is the government and civil service so inefficient that its cheaper to just give everyone money than mean test for the likes of fuel allowances etc.

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Over-Language2599@reddit

That's always been the case and is why they now do less means-testing than they used to.

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BoydHoyland@reddit

Why would people bother to save for a pension if they are just going to get 12k taken away? Why should one person paying in 35 years of nics to support todays pensioners ie you, be treated differently to anyone else? People getting private pension on top of state are also contributing more tax than you

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wolfie66666@reddit

You obviously don’t have to exist on the lowest state pension in Europe. It is disgustingly small as it is.

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Practical_Drink8676@reddit

Our pensions are currently piss poor and means testing is expensive

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jon080984@reddit

Restore the child benefit cap

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ClacksInTheSky@reddit

Why should children suffer so you can enjoy 5p off per litre?

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freddie_RN@reddit

Why should we continue to pay for people who can't afford to have children, to have children?

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slimboyslim9@reddit

You’re not paying for the adults who made that decision, you’re paying for the children who had no choice in the matter.

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Temporary-Minimum-20@reddit

Why should we continue to pay for people who can’t afford to drive, to drive?

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Splodge89@reddit

So they can get to work and pay more taxes and further fund the systems we all use.

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ClacksInTheSky@reddit

Cool, children eventually go to work when they're older, too.

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Splodge89@reddit

Not before they suck six figures out of the system first

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Kiss_It_Goodbyeee@reddit

Let's ban children. lol.

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threewholefish@reddit

So you'd rather increase immigration then? They don't cost nearly as much, and contribute just the same to society!

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Splodge89@reddit

To be honest, all other things equal, an immigrant labourer and a home grown labourer - the immigrant one over their lifetime is cheaper than the home grown one. We didn’t have to pay to educate and nurture through their first 18+ years of life. But obviously immigrants=always bad…

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EyeAware3519@reddit

Why should we continue to allow people who can barely make ends meet as it is be able to get to work?

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TomatoMiserable3043@reddit

Why should we do anything for anyone?

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Ricky_Martins_Vagina@reddit

Finally, I have found my people 👌🏻

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AgileSir5009@reddit

This

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LemonadeSocialist1@reddit

You do realise that the economy, and consequently people’s finances, can change quite suddenly don’t you??

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ClacksInTheSky@reddit

Because it's shown to directly affect the children involved and not a benefit to the parents and we want/need more children or we'll continue to need to import labour in the future.

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DebsUK693@reddit

Because its a pyramid scheme and you need younger generations to pay for you in old age.

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Specialist_-Berry@reddit

Children dont actually get that money, their parents do. Many (not all) people are poor because of poor decision making. Giving free money to people doesn't actually fix many problems

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DoomscrollerUK@reddit

I would still prefer the children not to starve though.

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bez_lightyear@reddit

Like making the decision not to be born to rich or affluent parents, perhaps?

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ClacksInTheSky@reddit

Well, that's wrong on so many levels. Not to mention a ghoulish outlook.

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Maetivet@reddit

“Put kids into poverty so I can have 3p off a litre!”

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Pathfinder-electron@reddit

It can be. Look at Hungary. Same we did with COVID times

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threewholefish@reddit

Why can't they subsidise public transport instead, like Melbourne is doing?

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Timely_Ad_125@reddit

They already do, they have the £3 pound single fare cap, but that isn’t really that cheap still.

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concretepigeon@reddit

They’ve frozen rail fares too.

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Timely_Ad_125@reddit

At record high pricing, now I understand it can go higher still without the cap but it’s still not very helpful is it. Public transport doesn’t work for this country to rely on. They’re unreliable, they don’t run often enough to suit most people, and they’re no cheaper than driving, so where’s the incentive?

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concretepigeon@reddit

I don’t disagree that public transport needs massive improvements but it’s wrong to say the government aren’t taking some steps to reduce the relative cost of public transport. The other thing that I think is being overlooked is that a massive amount of car journeys in this country are done to replace a short walk and high petrol prices might at least serve to nip that in the bud.

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threewholefish@reddit

Yeah, so why don't they increase subsidy in this time of crisis?

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TomatoMiserable3043@reddit

They do, in the billions, and have done for years in several forms. The bus fare cap is paid for through subsidies, as is concessionary travel, and rail receives more than £11 billion a year in subsidies.

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threewholefish@reddit

Sure, but why don't they subsidise it more in this time of crisis?

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TomatoMiserable3043@reddit

*"Why can't they do this?"* *"They do, a lot."* *"Not what I meant, why can't they do it* ***more?"*** It would have a minimal impact. You can't instantly subsidise new buses, routes and drivers into existence- and unfortunately, public transport only helps (some of) those who have to drive *to* work, not those who have to drive *for* work. There's also people's reluctance to abandon their cars, and many others reasons. The 'why don't they do it more right now' could run to thousands of words, but you only asked why they don't do it. They do.

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threewholefish@reddit

If I go back and add "further" to my original comment, would that make you happy? Have you the same complaint about OP's wording, given that the government haven't restored the last emergency cut they made to fuel duty? The more people that use public transport, the less price pressure there will be on fuel for those who still drive themselves. I'm aware that this will not happen overnight, but in the long term, it can be a better and more stable solution than reactively freezing or cutting fuel duty every time the price of oil spikes.

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TomatoMiserable3043@reddit

> If I go back and add "further" to my original comment, would that make you happy? I wouldn't have replied to it in the first place if it had been there, or if it had been what you had originally meant when you thought that they didn't. I replied to correct an error. As for your other point, OP's question had already been answered (and said point addressed) several times over before I got here. It would have been redundant for me to do either again.

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Success_With_Lettuce@reddit

Because it is INCREDIBLY dependant on where you live if you have any sort of decent public transport. Melbourne is a city, UK is a country, a better comparison would be why don’t they subsidise public transport in London only, like Melbourne is doing. (Both our countries most populous cities, 9mil, 13% of UK vs 5.4mil, 19% of Aus)

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threewholefish@reddit

Of course public transport should be improved across the country, but even subsidising the existing infrastructure can help reduce fuel consumption and ease price pressure for those who have no choice.

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PolarLocalCallingSvc@reddit

It has been pretty much every year since 2011. Fuel duty has been 'frozen' in absolute terms since 2011-2012 excluding a temporary COVID cut. Accounting for inflation, it's a real terms cut of 33.2% since this time in 2011. Of course it should really be changed to a percentage of the cost rather than an absolute figure, which would mean it would've risen by less in absolute terms, and would go down in absolute terms when the cost of the fuel goes down.

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Suitable-Tough5877@reddit

Reddit being it's usual snarky self, but it's a perfectly good question, and has been done in the UK in the past and in other countries currently. Basically government tinkering has gone out of fashion.

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gadget80@reddit

It already has been. The 5p emergency reduction implemented during the last crisis. That stayed for years even as the oil price plunged because politics. Which is why another one is a bad idea. Reducing taxes isn't the solution to a supply shock, we need to reduce demand and the price will rise until we do.

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Ieatsand97@reddit

Yeah and the price rises to reduce demand. Cutting the fuel duty doesn’t magically open the strait of hormuz or magic up oil, it just means more people can buy more petrol which is getting scarcer and scarcer and it will bring prices back to what they are

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ImmediatePiano6690@reddit

It's said the reduction is potentially scrapped this year.

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_diamondgray@reddit

Exactly, and everyone whines when emergency measures should be removed (removal of a cut is seen as a hike). Which is politically inconvenient.

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Splodge89@reddit

The removal of temporary measures being seen as an increase in taxes/reduction in funding pisses me off no end. Like the extra £20 a week people on benefits got during Covid no questions asked. When it went away there were people crying that they’ve had their benefits cut. When in actual fact they’d been handed thousands of pounds extra….

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DebsUK693@reddit

Semantics. Same outcome.

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National_Big91@reddit

Why can't people turn to smaller engines and driving less as an emergency measure?

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Free_Ad7415@reddit

Because it would be incentivising some people to drive, when many could just cut down on miles driven, incentivising the use of fossil fuels and also the government need the cash, I’m sure.

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curium99@reddit

The government needs the income. As a country our debt is growing and the interest is taking up a scary amount of expenditure. Any cut from the government would be taken by the suppliers as additional profit. They’d be unlikely to reduce the price. I’d rather the income go to the government than private companies. In summary the government should continue with the increases. The only way to reduce the price is to reduce demand.

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wolfie66666@reddit

As we are still borrowing, in effect, we are borrowing money to pay overseas aid. That’s just crazy - borrowing money to give it away! By all means, if we have a budget surplus then share it, but don’t borrow to fund it.

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nl325@reddit

Didn't they do this in 2022 and the fuel companies still overcharged relative to what they paid and pocketed the difference?

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Over-Language2599@reddit

Exactly. Basically, any initiative such as this, or winter heating allowance, etc etc, is just a way to funnel taxpayer money (that is, yours and mine) into the profits, and pockets, of fossil fuel companies. Just as any "help to buy" scheme, etc, translates directly onto the bottom line of housebuilders.

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BoydHoyland@reddit

Windfall tax on energy companies and profit caps to stop the price gouging. These companies take the piss. Takes less than a week for the price to go up by 10p, and will probably take a year to ho down after it ends

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richbun@reddit

Petrol has gone up about 20p and of the increase 4p is VAT. The Government certainly didn't plan this year to get that 4p, which is worth a few million every day, so yes, they could look to do something about tax somewhere.

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Ieatsand97@reddit

People be acting like its 2022. We have seen far worse in the petrol prices, it hasn’t hit £2 a litre yet. The reason they can’t do it is because 1. Its not an emergency yet, yeah the situation isn’t great but 150-160p isn’t dire and 2. If they, lets say took 10p of the duty, fuel prices might fall, but by about 5p a litre and then the petrol companies would pocket the difference. Its like stamp duty, when they remove it, prices increase (I still have a reason stamp duty should be abolished but thats for a different day) rather than house prices coming down. Posts like this push petrol prices up.

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UnableEye325@reddit

It made no difference last time it was reduced, the companies that supply fuel just absorb it anyways. Reducing tax is not the answer.

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Milam1996@reddit

The UK is so full of people who feel entitled to absolutely everything as a public service but also don’t want to pay a penny in tax. Fuel duty exists because governments need tax revenue to provide services.

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DoomscrollerUK@reddit

Ironically the material amount of tax that makes up the price of fuel in the UK, most of it a fixed amount, means that fuel cost have increased less in the UK than in many other countries. As an EV driver I’m supportive of targeted help for those that need it. I’m not a fan of tax cuts that benefit rich and poor alike.

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PantodonBuchholzi@reddit

The simple answer is the government needs the money. They also see how a) largely ineffective it was during Covid where a chunk of the reduction was pocketed by petrol station operators and b) how difficult and unpopular it is to reverse such “temporary” measures. It also helps to push people towards EVs which some politicians would consider a bonus.

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Wild-Individual6876@reddit

Also, please fill potholes

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TomatoMiserable3043@reddit

That's local government, not The Government.

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Subject_Ad1286@reddit

Local government is highly dependent on central government for funding, and also has to carry out (costly) statutory obligations set by central government (eg social care), so you can’t just separate the two. Central government cutting local govt funding and requiring them to spend more things that aren’t pothole repairs results in more potholes.

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threewholefish@reddit

The Government have drastically reduced central funding to local government though, so it's still fair to blame them

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Electricbell20@reddit

I believe this was just don't in Ireland and most are complaining that it doesn't appear to have shifted the price at the pump.

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GlumAd9856@reddit

Governments need money. When the fuel price increases they do get more VAT - however, it also makes government more expensive as lots of things they do require fuel.

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Dazzling-Event-2450@reddit

Which actually strikes me as bonkers, the government actually taxes itself. You’d think agencies such as Ambulance, fire, police etc would access fuel from a government central supply and buy at cost with no taxes.

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romeo__golf@reddit

If prices don't reflect reality there's more incentive for consumers to purchase "excess" rather than economise, which increases the likelihood of shortages.

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ImmediatePiano6690@reddit

Good luck, it's sad the chancellor actually wants to scrap the reduction the last government implemented, as well as something else the previous government did to stop fuel prices killing job security. If they do actually start increasing tax on fuel then you can be certain they won't be in power next election, people are sick of paying for everything and having little to nothing to show for it. But it's okay, we can continue to pay people more a month than minimum wage for absolutely sod all viable reasons, just playing the system because they don't want to work, ruining it for those who genuinely need support because they can't work.

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Logical_fallacy10@reddit

They can. But they don’t want their beloved tax income reduced as they need this money to send to u crane and pay for the new people that come to this country.

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laoxue@reddit

As others have said, the current problem is a lack of supply and over demand. Cutting the cost of petrol is only going to exacerbate that. Some kind of work from home where possible might help but most businesses probably wouldn't go for that given that they're in the middle of trying to get everyone back in the office.

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ClacksInTheSky@reddit

Because it would generate less tax revenue to pay for the things we need. So we'd have to borrow even more to keep the lights running. Fuel Duty isn't a negligible amount of income to the treasury.

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reuben_iv@reddit

not necessarily because vat gets charged on top so they’re actually getting more tax than they planned, they could cut it, if they wanted

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PantodonBuchholzi@reddit

While that’s correct the difference that would make would be hardly noticeable and like during Covid probably mostly pocketed by the operator rather than passed on.

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ClacksInTheSky@reddit

VAT is charged on the same price that duty is charged on, though so if they cut the duty the VAT is still the same because the base price hasn't changed

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reuben_iv@reddit

It’s charged on the total price, price goes up vat goes up

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Elegant-Ad-3371@reddit

It wouldn't help. The problem is supply. Allowing the price to rise encourages people who can use alternative methods from the car but choose no to to use those, reducing demand pressure. Demand could also be massively reduced by reducing speed limits.

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concretepigeon@reddit

Cutting duty wouldn’t increase the amount of fuel arriving in the UK. The government are probably hoping that high prices will at least mean people use fuel more sparingly to reduce demand. Without some sort of additional price cap then cutting duty risks prices staying high as suppliers would realise they could get away with pocketing what would go in taxes and taking increased profits. So we’d just see more money to the multinationals and less money for public services.

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Sure-Bath6750@reddit

It isn't a good way of supporting people, if support is needed. Retailers will just ignore/absorb it anyway, like they did last time. I'm sure it's on the table but I suspect they'll land elsewhere on emergency support.

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cwright017@reddit

Because that money is being used to fund other things, and the government ( regardless of what they say ) would prefer to keep the money to fund the thing as long as the increase in cost is manageable. The equation changes if suddenly enough people are unable to afford the increase / manage it themselves as then it becomes a large enough voter issue that if they solve it they win brownie points.

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smoulderstoat@reddit

Experience shows that tax cuts are retained by retailers as extra profit, not passed on to customers in lower prices. That's been the case with petrol before, and also with other taxes: when VAT on women's sanitary products was abolished [prices didn't fall](https://www.theguardian.com/society/2022/nov/10/uk-retailers-not-passing-on-tampon-tax-savings-to-women-report-says), and all of the money went to retailers in profit. It didn't help the people it was supposed to help at all.

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CarpetPedals@reddit

Why? Even at £1.46 per litre, it’s actually historically very low. 20 years ago it was £1 a litre. So it’s a bit mad that we haven’t even hit £2 yet!

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soundman32@reddit

You are proposing removing billions from the treasury, by giving every driver a discount. How about targeting only those who are poor? Lets do the same with heating oil. The current 'targetted' support means most people who depend on oil for heating get nothing.

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BarNo3385@reddit

To quote Sir Humphrey "the Treasury doesnt believe in giving money back." Most governments, though the current one in particular, are in the business of tax and spend - that is directly control as much of the economy as possible by continuously increasing the tax burden and the share of economic activity directed by the state. How does cutting fuel duty help with that?

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PreparationWorking90@reddit

Every UK government since Margaret Thatcher has sought to control less of the economy and has privatised everything they possibly could - and some things they couldn't, so they have to be re-nationalised/bailed out by the government when they collapse.

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London_weather_pics@reddit

It would increase petrol use which could lead to fuel shortages as the supply of petrol would not increase

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Hungry-Cricket-9872@reddit

Because a different tax would have to go up. Which group will pay higher taxes in order to reduce fuel duty?

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Lunar-Bill@reddit

The problem isn't price, but scarcity. Forecourts/refineries will simply take that 5p out of the tax take and put it straight into their own pockets, then add some more when the shortages really become acute. I'm not even sure why you would reduce fuel duty in a time like this, given the inflationary impact on non-fuel goods is likely to be greater.

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lovelight@reddit

It's been frozen for bloody years. A direct subsidy from the rest of us to motorists.

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BenCrossley@reddit

I can't see a compelling reason why it should be. Yes prices have gone up a fair bit lately but I don't want the government stepping in every time something like this happens.

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PastLanguage4066@reddit

Out of interest, do you drive an EV, use public transport, or cycle? I’m not saying you are wrong, but I do wonder how objective anyone can be on this topic.

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ClacksInTheSky@reddit

I wouldn't object to them helping businesses with rising fuel costs, especially haulage/transport. That's a smaller cost than helping "everyone" but keeps food prices down for everyone.

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OkAdvisor6680@reddit

Because we already have a budget deficit - the government needs tax income. What would you sacrifice by cutting fuel duty? NHS, education, defense?

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BitterOtter@reddit

It's already reduced and has been since COVID. The 5p cut was due to be phased back in over several months starting in September. That might now be delayed, but I doubt they'll cut it more, unless they introduce a temporary sliding scale to limit how much extra you pay over a baseline value pre war, but that sounds a bit complex to administer so I expect we'll just have to ride it out.

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Cultural_Tank_6947@reddit

You'd probably have to reduce some expenditure on a commensurate basis somewhere.

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TravellingMackem@reddit

A reduction in fuel duty won’t equal a reduction at the pumps. Welcome to capitalism.

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ClacksInTheSky@reddit

You could force it to change but that's _socialism_

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FourCats44@reddit

It could be. With COVID they dropped VAT to 5% on a lot of things. It just costs money and then you get into the cycle of "underfunded NHS" and "Doctor's strike" and "increase spending on defense budget" etc...

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spikeboy4@reddit

Iirc the last time fuel duty was cut by 5p, forcourts just increased prices by 6p. If it was reduced further, I suspect the same thing would just happen again tbh. Although it would be a good way to catch them at price fixing if they were being investigated (and our regulators had the teeth to enforce penalties)

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D1789@reddit

It can, but we’ll just get taxed in another way to make up for it. Our governments are great at finding ways to tax us, but terrible and spending our taxes efficiently, so they’ll need to plug that gap that a reduction will make.

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Gloomy_Pastry@reddit

And if it gets announced for the 1st of next month, amazingly every station puts the fuel up by the reduction - 2p the night before.

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