UKC

The government plans to unfreeze the fuel duty and maybe the booze duty too.

Is this progressive or regressive?

In reply to pasbury:

I think this government are becoming progressively regressive

In reply to pasbury:

The poor are always going to be disproportionately affected by a rise in the cost of fuel. Especially true for the rural working poor. 

In reply to pasbury:

Raising fuel duties will push the price of everything up = more VAT revenue, too. Double punishment.

In reply to pasbury:

Regressive, as people have said, it hits the poorest more, pushes the price of everything up.

In reply to pasbury:

Socially regressive

Environmentally progressive

In reply to stevieb:

It would be environmentally progressive if there were more environmentally friendly alternatives for rural transport or heating etc. It will act as a driver for wider use of commercial electric vehicles, but will make the few remaining bus routes in rural areas less viable.

I also can't see an agricultural worker being able to swap his 10 year old pickup for a Mitsubishi PHEV, or being able to swap his oil fired heating for ground/air source heating.

In reply to pasbury:

I'm not convinced about the effect of increased fuel duty being inflationary. As an example, your average white van here will do a tank (60litres) a week. An increase of 5p/litre duty would cost the tradesman an extra £3 a week. That same tradesman and his mate probably easily spend £5 a day each on bacon rolls and coffee i.e. the same as they spend on fuel a week. The rise in cost of their food easily outstrips what fuel duty would do, yet no-one complains about the inflationary effect of that.

The only people claiming a justifiable inflationary effect from fuel duty would be high mileage users. The ultimate of those would be a delivery company, but when you spread the cost of the duty over the cost of the goods delivered then the additional amount is so small it cannot be justified. 

In reply to birdie num num:

in a progressive or a regressive way ?

In reply to GrahamD:

They're regressively becoming progressively more regressive.

HTH

In reply to Andy Hardy:

Its how you define poor.
The people in the global south are always going to be disproportionately affected by the amount of CO2 generated by us.
Depends if you care more about a person in rural england not able to afford an iphone, more than you care about someone in say Sudan not having a crop and their children starving to death.

In reply to Ridge:

Obviously

In reply to J1234:

Fair point, but the context of the OP was about UK taxation being regressive.

In reply to Andy Hardy:

Yes. I would say if you look at it in a global sense iti s progressive. I would also say that if you look at in the context of the next 100 years it is progressive.

In reply to pasbury:

It's politically expedient. The poor will pay proportionately more but these are the taxes that can be raised on health and environmental grounds as well as fiscal necessity, and which will both work to lower the strain on the health service while paying for more of it.

In reply to J1234:

I think the difference is whether you are judging the kind of tax or the method.

Taxing fossil fuel for example, and subsidising renewable, is progressive

But fuel tax is just a revenue stream, it's not dedicated to a purpose, so what you effectively do is raise the total tax income but in a way that the poorer drivers are disproportionately affected.

Does raising fuel duty reduce fuel consumption and does it do so in a way that doesn't impact lower earners. 

In reply to J1234:

I think this is only relevant if the consumption of fuel goes down as a result. I would suggest that demand for petrol and diesel are quite inelastic.

It needs bigger thinking to reduce fuel consumption, electric vehicles obviously, but a more joined up public transport system is just as important.

I fear this step is really just a revenue raising exercise.

In reply to pasbury:

It makes no sense that fuel duty remains fixed and is not linked with energy prices, IMO.  All the while it remains frozen it is actually going down in real terms.

Fuel prices should be at a level where they do influence energy purchase, be it cheaper to run cars, better home insulation etc. but at the current rates there is not a huge amount of evidence for this behaviour.  Chelsea tractors on the school run are still proliferating.

In reply to pasbury:

 

I do not think it inelastic, if fuel prices went up enough, fuel use would go down. How far you could do this in a democratic society I do not know.

Maybe it is. But cutting CO2 and raiasing revenue which increases the pot of money the NHS and social care can draw off, surely that is progressive?

 

In reply to pasbury:

An American study found that petrol price does have a significant impact on demand, far higher than I would have predicted.  

Short run (< 1 year) price elasticity is 0.26

Long run (> 1 year) price elasticity is 0.58

So in the long run, a 20% increase in the price of fuel will result in a 11.6% decrease in use.

https://www.thoughtco.com/price-elasticity-of-demand-for-gasoline-1147841

Almost all advances in fuel economy in cars in the last 50 years have been linked to either very high fuel costs and/or government regulation.

In reply to pasbury:

IMO fuel duty is fairly regressive in as much as it hits those who need road travel to work, it's a less affordable outgoing for the poorer and the rich are more able to mitigate by running new (expensive) efficient vehicles without recourse to expensive finance. It also pumps up the prices of other essentials like food which again are a big chunk of poorer households' outgoings. That said, in this instance I think it needs doing, not as a figleaf for the wilting 'brexit dividend' lie but because we urgently need to be getting our fossil fuel consumption down and our air quality up. Tax is a powerful tool in achieving that, one that could be boosted in efficacy were the additional revenue generated directed to support effective evidenced policy in this area rather than plugging the growing holes in a dishonest/delusional government's budget.

Alcohol duty again is IMO regressive, it is less affordable for the poor but it is also a public health tool and it shouldn't be off limits as such.

jk

In reply to Toerag:

How on earth have you calculated your 60 litres per week?

In reply to J1234:

You would have to significantly increase fuel prices to make a relatively small reduction in use. That would be mainly a reduction in leisure use, e.g. trips to the crag.

In terms of domestic use, people still have to commute to work. They'd continue to do so until:

A  Public transport was the only possible option, (assuming it exists at all, or was cheaper than driving).

B. People were able to car share.

C. Employers put on subsidised 'works busses' as used to happen on the 'olden days'. (My employer's trialling that now as a 'carrot', the stick being you won't be able to park remotely near work next month unless car sharing, the bigger stick being the subsidy ends in a couple of months). Although it will still remain as an option for commuting, it will need to cover costs and operator profits and prices will continue to rise to cover fuel duty rises etc.

If A, B or C aren't practicable:

D. Continue to absorb the price rises and drive. We're now at the point of inelastic fuel use, driving is the only option and accept a falling standard of living.

E. For the working poor with no other option it will reach a point where it costs massively more to work than rely on benefits, (the very low paid already lose money by working).

Once you're into D & E, tax revenue from fuel duty and income from VAT on goods will fall, with increased social costs.

Edited to correct trying to type on the works bus...

In reply to Toerag:

But you seem to have not bothered looking at lorries, rail or any other form of transport, and where do  you get 60 litre a week from?

Lorries are moving pretty much, as much as they can, any not running time is not earning time. 60L a week is less than a day for a lorry.

In reply to krikoman:

60l wouldn't keep a HGV ticking over for a day. I get 50+ mpg on the car, and can get through almost 60l a week in commuting and fairly local trips to go running and walking.

In reply to krikoman:

My 60l comes from living somewhere where tradesmen aren't blatting up and down motorways all day long. If you were a tradesman working in Plymouth for example there's probably no need to be taking on jobs in Exeter. If you're one of these tradesmen blatting all over the country then fair enough, your fuel usage will be higher.

Lorries - as stated, when the additional cost is spread out over the cost of the goods transported it becomes insignificant. You might notice it for low value goods like earth or rock I suppose.

 

In reply to pasbury:

Worth pointing out that raising fuel duty discriminates on everyone outside of London who don’t have access to reasonable levels of multimodal public transport. Areas in the north of England also receive significantly less investment on public transport per capita than the south east.

There’s no way to get to Bakewell from my house except walk or drive, and my one hour drive to Derby extends to nearly 2 hours on public transport if it’s running at all

In reply to Toerag:

Not food then?

 

 

In reply to paul_in_cumbria:

There's no way for us to get into town, 2 miles away and we're on a new estate!

The last construction company were paying for 8 years for the bus, it ran out last summer so there's no buses now!!

 

In reply to Ridge:

People can always find another way if they have to, price is a crude but often effective tool. One of the reasons for the Dutch being so into bikes, was the Oil Crisis of the 70s, that and road safety. 
 

 

In reply to GrahamD:

Yes but there must be an affordable alternative. I used to cycle to work and had the possibility of a bus if I couldn't be bothered. I took the decision to move out of the suburbs of Bristol to the Wye valley. I have no possibility of using public transport now and have never cycled because it's too far.

I regret this part of my lifestyle and would like to find an alternative, liftshare worked for a while, I looked into buying a Nissan Leaf but it was too expensive. I need to look at the bottom line all the time; but still commuting on my own in a petrol car is the cheapest thing to do and will be until petrol is about £3 a litre. All it does is cost me more.

In reply to Ridge:

F. Buy a smaller, less powerful, less cool car that can do 70mpg

In reply to Andy Hardy:

not a fair point, harping about Iphones is stupid.  People "just getting by" don't have iphones - myth. Just getting by means fuel duty will be just another few millimetres down towards being totaly economically submerged and overwhelmed.   No bus services, pay extra for everything you do and access.

 

In reply to paul_in_cumbria:

sums it up for us

 

In reply to stevieb:

There is not much that's less cool than my old Kia. How much is a 70mpg car out of interest?

In reply to Ridge:

Ha ha, fair enough, you’re not whingeing while driving around in a discovery. 

Here’s a 70mpg Car for a touch over £1k, bit of a high mileage, but lots of options under £3k. 

And if you could afford a newish car, even the climber’s favourite can qualify!

https://www.autotrader.co.uk/classified/advert/201804175632785?advertising-...

http://www.carbuyer.co.uk/reviews/skoda/octavia/estate/mpg

In reply to stevieb:

Manufacturers 70mpg pretty much equals 57ish in the real world with hills and a mix of road types. I can get 70+ on a slightly downhill long straight on a nearly closed throttle. A couple of hills and a bit of accelerating soon brings it back down.

In reply to paul_in_cumbria:

I believe that in the 8 years or so that fuel duty has been frozen, subsidies for public transport have been slashed, and so many services have been cut. This has hit rural bus services in particular.

so if you can afford a car it’s great, but those on lower incomes, or on benefits, have suffered.

and in cities the air quality gets worse and worse as the congestion increases

In reply to pasbury:

Well the poor will pay, the rich will buy a Tesla. Business as usual.

 

In reply to Toerag:

I only run a small fleet of 7 vans and I have just pulled the fuel invoice for the last month. It was a typical month for us so using that as a basis a 5p per ltr increase would cost me £1786 a year more, that is a lot of bacon sandwiches. Also the duty is on top of the pump price that has been going up for months now. Work local I hear you say. I wish that were viable but mine is a very competitive game and local to us is from Birmingham to Northumberland and sea to sea in between.