Where is the money coming from?

As usual, we the taxpayer will end up paying in some form or other. More stealth taxes to come? Without a doubt.

Here's my prediction: Labour will take out a massive loan at our expense and pretend everything's OK. Then, after they've been annihilated at the next General Election, they'll blame the Tories for increasing taxes and cutting public spending because most if not all of the future revenue will go towards paying off the massive debt Labour got us into in the first place. And, lest we forget, we've still got the 2.7 billion to pay off for Brown's disgraceful mistake and subsequent (failed) attempt to buy votes at a byelection.

The money comes from the increased petrol prices. 17.5% of the price goes to the Government, so as the price goes up, so does the tax we pay on it. So the government has ALREADY got more than the extra 2p would have given it if the price had not gone up.

Give it a year or so and we'll be forced to have meters implanted into our lungs so we can pay air tax. Which will be followed by another stealth tax to pay for the scheme's implementation, which (I need not add) will be over-budget and late.

Nick

I am glad that you have asked this question - all we need now is a member of Cabinet to step up and answer it.

The problem is they won't.

#3:

Thats how I see it as well. 4pMost people will agree that the price of unleaded/diesel has increased by 30p over the past couple of months. Well the VAT included in that £0.30p rise is 4 pence, straight to Clown and Co.

The Government has not got a clue. Even the spin is now obvious. I can see the headless chickens running around number 10 and 11.

I suppose now that the myth of prudence has been blown, the only remaining strategy for Brown pants is to spend everything so the Tories have a real problem in 2010. A sort of scorched UK policy?

andyjenk: You are failing to notice that although the VAT per litre has gone up, the higher prices means less litres sold. This could, in fact, reduce the total VAT on petrol.

"isn't the government getting a lot more cash in the form of oil tax revenues? The answer's yes but much of what they gain in oil tax they lose in VAT and corporation tax. They're also due to lose billions in stamp duty and corporation tax."

Try reading your blog entries before publication - you are repeating yourself.

More fundamentally, higher oil prices result in gains in VAT receipts, because VAT is ad valorem. When charged on a higher level of fuel price, it will deliver greater revenues, because fuel is price inelastic.

By the way, how exactly does the government deciding not to increase tax constitute a "tax cut"?!

2p fuel tax rise cancelled. Well excuse me for not being in the least bit grateful! A darned sight more will be clawed back in revenue before I see any benefits to this particular move. Cynical? You bet!

When is someone going to talk about the real tax haul.

1995 39.4p TAX - 54p fuel cost

1996 42.9p TAX - 55.8p fuel cost

2000 58.6p TAX - 76.2p fuel cost

2005 60.6p TAX - 91p fuel cost

2007 63.7p TAX - 95.1p fuel cost

What has 2p got to do with it?

No problem to Gordon and Co they know they will not have to pick up the pieces after the election.

As usual when Labour both Old and New leave power the economy is in a mess.

Well done number 9 for explaining the very simple mechanics of an ad valorem tax on the rising price of a product subject to inelastic demand. More prosaically, that is a definition of profiteering.

Meanwhile, this is postponed not lost revenue and £1bn is just a rounding error in the context of an annual budget of over £600bn. The money can be found elsewhere easily from the monumental amount of waste generated by this profligate government.

How much longer must we wait for this bunch of mountebacks to go?

Money not taken by the Government is not lost to the economy. It remains in the possession of the individuals and companies that earned it - to spend as they please, rather then spent as the government sees fit.

I have banged on before about the insidious effect of overhead on profitability. No instituion can afford to allow the non profitmaking part of the business to grow out of proportion to revenue.

Government revenue is down and falling. So what. Get out the knife and slash the overheads. The more that they government can save, the less they will need to take as tax leaving more to be retained in the wealth creating part of the economy. So many companies are on a knife edge, and the smallest thing can make the difference between going under or surviving.

We don't need walk to school co-ordinators and other non jobs right now.

(sorry about the gratuitous use of knife references)

I agree with some of the previous commentators. The monumental risk to the British people now is that The Brown Terror opts for a scorched earth economic policy in the fag end of yet another ultimately disastrous period of Labour in government (it's a hallmark). Labour knows it has little or no hope of winning the next election and so has nothing to lose by increasing economic recklessness. If they get turfed out at the next election, the Tories (as usual) will be faced with turning around a decade or so of unreconstructed socialism (when we will ever learn that socialism is fine in theory and useless in practice?). If the scorched earth policy results in a miraculous general election win for Brown then, hey presto, another 5 years on the John Lewis' List expenses bonanza! I think I'm in the wrong job ... that's if I'm in a job at all for much longer.

The grubbyment have already taken more in tax in the first 6 months of this year, due to the massive increase in energy (oil, gas, electricity, petrol, diesel etc) prices and the VAT charged on it, than they are losing in "delaying" the 2p per litre rise on petrol/diesel.

Delaying a planned rise, before it happens because the government has alreasy taken more revenue from taxpayers than the rise was calculated to take, is NOT a tax CUT!!!

Really Nick. Why are you trying to blatantly defend every pathetic move this awful failure of a government makes? Even to the extent where you have to make yourself look utterly foolish by being factually, completely incorrect?

Announcing that a delay (Brown's ACTUAL word) is a tax cut is as party political and facetious as one can get. Stop writing for the BBC and at least honestly declare your blatant pro labour bias.

@14, Totally spot on!

the government should be looking to make the state a lot smaller and get it's nose out of our private lives. At a time of impending recession, the last thing the government should be doing is continuing to increase in size and expense.

But what do we hear today? The Government planning to spy on EVERY phone call, email and private communication in this country!!!

This is FASCISM!

Briantist: Yes, but everything which goes up in price and carries VAT means extra money to the Government. That's the difference between their win-win and our lose-lose situation.

Britain could start saving money by getting rid of useless quangos. I remember a discussion on here when someone brought up the British Potato Council(?) that apparently employs 49 staff and has a 6 million quid a year budget. Erm what's wrong with this picture?

re: 17

It's terrifying isn't it? If that becomes law I'm emigrating as soon as I possibly can. Maybe Scotland and Wales will be independent by then and we can all escape there. It seems Labour can always find money for ridiculous, bloated, illegal and unethical projects but there's never enough to (for example) pay the police a proper wage.

I Like that, thats very funny or have you been drinking?

Not adding 2p to the price of fuel is actualy a tax cut. what are you talking about.

Its not a tax increase, thats whats it is. Quite different.

I wonder if Brown has any more tax cuts in mind.

Perhaps he wont increase income tax by 10% then we really will be better off.

ROFL.

Oh yes..

If you vote for me as PM I wont triple VAT.

Now you really are better off.

All is well

Nick

What's your take on the overall message you get when reading comments on your blog? Are we all self-selecting, anti-Labour commentators, or are we just a random selection of the population, the majority of whom are vehemently anti-Labour? When I read comments on political blogs anywhere these days, the majority of people seem to be spitting blood and teeth at the mere mention of Brown and his shambles of a government. Can Labour really limp on like this for another 2 years, or is there some mechanism for the British people to cut their losses and turf out one of the most disastrous administrations for a long time? It's almost embarrassing to watch this lot make cock-up after cock-up which ultimately has to be paid for by us taxpaying mugs!

This government has finally killed the golden goose. They will leave, tails firmly behind them, with Britain sinking in debt and Useless Tories being blamed for the drastic spending cuts (If they can/dare!) they need to introduce to stabilise the economy.

Prudence is lying in the gutter, face down, with Nu (Improved) Labour jack boots all over her body.

The Red Flag is finally flying here, Soviet style economics as well!

Re 23

P.s.

I am not anti- Labour/Conservative/Liberal but just plain old anti-incompetence. With a little bit of contempt for money gabbing MP's.

I think the problem for most people is that we pay our taxes more and more on every little thing in life and in death - but the services we seem to get do not seem toimprove they get worse and worse. I think most peoplebelieve that there is a huge abount of waste of our money. A good example this week is the John Lewis account. But every week there is something.

A good parasite does not kill its host. Maybe every single one of us should simply refuse to pay tax of any kind to these criminals; without the lifeblood of cold hard cash they'll shrivel up and die.

Nick - would you have a go at explaining to the opposition that, as you point out, just because the government gets more money from tax as oil prices rise it does not mean that they get more money overall?

I've just watched the debate on Osborne's latest cunning plan (swiped from the SNP apparently) which uses the non-existent 'extra' tax to pay for a reduction of 5p, to be clawed back when prices fall.

Quite apart from the impracticality of the whole idea (because it de-stabilises fiscal policy, as Cable so eloquently explained), can you imagine the response of the lorry drivers (and most on this board) when the government asks them to meet their side of the 'bargain' and pay more for their petrol and diesel than they need to? Now that is what I call being out of touch with reality!

I'm surprised that nobody has mentioned the RAC study that shows that taking everything into account us motorists are now paying 18% less to drive than we were in 1988.

Well, I'm not really surprised because the finding flies in the face of all our entrenched prejudices. After all, we all KNOW that the motorist is being hammered by this government.

re: 29

Well I'm paying more than I was in 1988, regardless of what the RAC study (no doubt with highly flawed methodology) says. Everything you say is in defense of the indefensible. You are not a reliable commentator I'm afraid jimbo, you are a Labour puppet!

# 29

Well, I am not too surprised because politicians are finally waking up to the often unintended consequences of their policies.

It is called human nuture, although just recently, it has been delineated into 'behavioural economics'.

Using the RAC example, motorists simply ignore that reality (18% 'less to drive') because of other factors, such as being clocked by Gatso cameras and fanatical policemen e.g. North Wales, plus more crowded roads and so on.

None of these things being directly related to the cost of driving, unless of course, you are unfortunate enough to be caught by one of those speed cameras, but all playing a part in sub-conciously pressurising the motorist.

Who is almost certainly being pressured tax-wise elsewhere, hence the volatility of reaction to petrol prices.

#30 power_to_the_ppl:

Thank you for that reasoned evidence-based response. I had not realised that the RAC was an arm of the Labour Party, but you learn something every day.

I can only stand in awe of your independence of mind, typified by your intellectually rigorous proposal that " ... every single one of us should simply refuse to pay tax of any kind to these criminals; without the lifeblood of cold hard cash they'll shrivel up and die." How very sensible.

I was trying to get some sleep and all the noise from this blog woke me up. Well, here's my bit. I think Gordon's got one last weapon to use to raise money: a big car boot sale. What he could do, is try to sell all of those failed policies one last time. Nope, maybe not, even if he could sell them they wouldn't be worth much. I'm going back to sleep.

re: 32

*Yawn* I stand by that. They are parasites and always will be as long as we give them our sanction. Can you honestly say you're happy with our current government? Let me guess, you'll say 'Yes, they're great'. BTW I can see your strings ;)

re: 33

Brown could put his cabinet in the stocks and auction off the chance to throw rotten tomatoes at them. I'd pay a fortune for that, even if my money got sucked into the Labour black hole.

#21

No, it really IS a tax cut, honest! It's a tax cut in exactly the same way that Gordon always talks about Conservative spending plans being "cuts to NHS services" and the like.

It works like this. Lets say GB says in the first year after the election, Labour would increase spending on the NHS by 2% above inflation, and DC says the Tories would spend 1% above inflation (and reduce waste). This means DC would spend less than GB in headline figures. So, even though both parties would increase spending by above inflation amounts, GB claims Tory cuts due to the slightly smaller increase.

So, because they are delaying a measure that would increase revenue, that means they are getting less than they had planned to get, which makes it a tax cut.

In much the same way it's always sunny in Manchester and it always snows at Christmas!

Interesting that the report on Equitable Life should be published just after the Honourable Members go on their summer jollies.

I have a question which needs answering. When did the MPs Pension Scheme transfer some of their assets from Equitable Life?

Surely there ought to be an investigation into all the funds which were transferred out of EL in the six months period leading up to the decision by the High Court that said that EL ought to meet all the guarantees.

I sincerely hope that taxpayers will not have to pick-up the bill.

A final point. I hope that all BBC commentators will declare that they did or did not have an interest in Equitable Life. What interest did any BBC staff, officers or reporters have in Equitable Life. All interests of BBC staff should be declared, surely there can be a conflict of interest.

Never mind about the 2p, where will the money come from if we all stop using petrol?

Using the "have to cut spending on blah, blah" is a lame excuse that political pundits should be hammering ALL parties on.

Non-drivers enjoy a massive subsidy courtesy of the motorist, but I have not yet heard any party pointing out that ALL taxes will have to rise to cover the inevitable revenue loss. You cannot tax motorists under the guise of "pollution" and then tax becuase there is no "pollution".

Jimbrant, I keep accurate records of my travelling expenses and despite downgrading from a rover 800 to a diesel renault clio in 2003, I am paying about £300.00 MORE this year to travel than I did in 2002! Stick your RAC "survey" where the sun doesn't shine!!! The government HAS made more money from the VAT on combined increases in energy (gas electric, oil, petrol, diesel) than they are losing in any delay on introducing this 2p tax. Domestic motorists may have reduced their usage, but not by enough to offset the haulage industry's increase in costs. After all, if a lorry has to deliver from Dover to Carlisle, they cannot think, Hmmmm fuel costs are going up, I think I'll drop this load off in Crewe!

There is only one thing worse than a parasite, and that is a host that makes a welcoming home for one!

I think a tax strike is an excellent idea as this Government have descended way past the point of the merely incompetent into the criminally abusive.

You may enjoy living in a socialist police state, where you have no privacy whatsoever and the state listen in on ALL you (once) private communication. Where the state can lock up whoever they wish without charge or trial or evidence, where the police have the means to commit extra judicial executions with a policy of shoot to kill with impunity and where taxes always go up and services go down. Where the government can behave in ways that we used to think only happened in backwards banana republics, but I would like to return to living in a democratic and independent nation run by a government of the people who respect and are subject to the law.

Any way you slice this "2p" delay, it is NOT a tax cut.

By using Nick's seriously flawed logic, Labour could announce one trillion pounds of tax rises one day, then on the next announce that they will not introduce that measure after all and spend the next election as the party that cut taxes by one trillion pounds!

Seriously Jim, you and Nick are providing excuses and therfore a welcoming host for the parasitic labour party. I liken you to the lazy and irresponsible parents of the two or three children that went to school with my daughter. We would spend entire weekends picking nits out of our daughter's hair, get her all clear only for her to come home from school with more headlice, because some lazy and irresponsible parents would not do what was necessary to rid their children of parasites. Those poor kids would then infest the rest of the school.

Labour are parasites and should be exterminated.

Quote - Now, you might say, isn't the government getting a lot more cash in the form of oil tax revenues? The answer's yes but much of what they gain in oil tax they lose in VAT and corporation tax. They're also due to lose billions in stamp duty and corporation tax, - unquote.

Thanks for explaining the situation Nick, because when I said the same thing, some came out denying it and that I did not know what was happening.

Now that it’s coming from you Nick, how is it that David Houdini Cameron can manage to reduce even 5 pence and say that the money is not lost?

NO GOVERNMENT IS REDUCING TAX ON FUEL and if anything some are actually increasing duty or reducing subsidies to fill the gaps in their coffers, including China and India.

To say that one reduces duty while fuel price is on the rise, is a very cheap PR exercise.

#30, power_to_the_ppl, are you that bloke who used to do a turn a speakers' corner about 20 years ago?

It's uncanny!

Where's the money coming from to fund the delayed duty rise is the wrong question.
The question should be: 'Where is all of the money we pay in fuel duty and vat going to - and why is is it being wasted ? The answer is the conflicts in Iraq and Afghanistan are draining the coffers at an alarming rate. It is a rather bitter pill to swallow especially if you recall that Tony Blair said he had seen compelling evidence of WMD's and that was the reason he took us to war - and try as they might the Labour Government cannot give us that proof - This is why our costs are so high. This is why our fuel is about the dearest in the world. This is why our taxes are driving up inflation. We are still paying for the criminal stupidity of Blair and the continued blind arrogance of Brown

Well said garyone. I have for some time thought and said the same as yourself. When will the public wake up. I regard Bush and Blair as war criminals and as for Brown, he should have no I am not going to be responsible for paying for this.

Furthermore, the senior officers in the services were complicit because they accepted the orders. They should have had the courage to say no! Would they have been charged with disobeying orders, taking into account the Nuremburg war trials, following orders is no defence against the charges of committing war crimes.

A judge will always say that ignorance of the law is no defence.

There are a lot of people out there who will hold their heads with shame when the truth starts to come out. Bush, Blair and Brown, all guilty as far as I am concerned. As for Mugabe I remind you that at least he stood for election, not like our own Gordon Brown.

Re; "The scorched earth policy." I'm convinced the Tories planned something similar efore the 1992 election. The calculation being that the GE would produce either a small majority Labour government or a rocky Lib/Lab coalition.They would have been faced with a hole in the accounts and Black Wednesday would have happened within days of the government coming into power. As the highly pro-Euro John Smith would have been Chancellor, he would have probably regarded bailing out of the ERM anathema so the crisis would have been worse. The Tories calculated that in such a scenario, the government would fall and they'd get back in. Sadly for them, they made the mistake of winning the GE and had to deal with the mess they had created, resulting in them putting VAT on fuel! Be careful what you wish for!

There is no hole in the finances and it is disingenious to even suggest there is a shortfall because there has been a huge increase in treasury revenue from the rises in fuel prices. In fact he should be cutting the price significantly because he has had more money, to bring it in line with where the revenue should have been had the fuel prices remained the same plus the 2p, plus this would stimulate the economy. However yet again the politicisation of this issue is being played out so that Joe Public thinks there is a hole in the finances, and therefore when the budget comes round and UK PLC has to borrow again it can be blamed on the 2p. Shame on the politicians, and shame on the journalists for reporting it like this!

I'm worried about the way some people in this blog are replying, seemingly more intent on attacking the government than the truth, then dismissing anyone who says otherwise as a Labour supporter.

I am not a Labour supporter in the slightest, for the record, and i do think the decision was wrong to delay this increase. If anything the government should tax fuel more (but while they are at it, get rid of the stupid new vehicle tax system), because of the environmental damage it causes. Yes, i know there are many different views on this, and what causes global warming, what effect it has, etc, but bottling out of the increase is not the way to go about doing our bit to stop damaging the environment. Its also irresponsible, when they are taking less and less money through taxation, to make the deficit even larger with this decision.

However, right now i still trust the Labour government more than i would the Conservatives. Simply because the Conservative party do not have any solutions, or even any ideas, on how to deal with this situation. Vague statements, and attacks on the government, with no alternatives, are not the way that a party who wants to be elected should behave.

Stop telling us what the government are doing wrong, and tell us what the alternative is. That goes to David Cameron, the Conservative party as a whole, and to a lot of people replying to this blog.

Where is the money coming from?

The money is coming from jimbrant, or it should be if there was any justice in this sceptered isle.

As he seems to believe that we live in the best of all possible worlds and are jolly lucky to have Gordon Brown as our nation's trusted caretaker, then I suggest jimbrant sticks his had in his pocket and subs the 2p for all of us.

While I'm at it, I must thank the government for all it's investment spending over the last eleven years while it carried out the plans of the prior tory administration to build Terminal 5, the high speed rail link, the M6 toll road and so on. It's a shame they decided not to propose anything of their own.

There will be now NewLabour 'Legacy' Just a mountain of debt.

garyone # 41

Agreed, but add in Trident.

If anyone can explain to me how the post-imperial UK benefits from this massive defence expenditure (and consequent massive taxation), I would be grateful. The obvious reason seems to be that being in the nuclear club, allows our leaders (of either party) to posture on the world stage, and keep membership of a permasnent seat on the Security Council.

I'm glad to see censorship is alive and well with the mods. My original comment was that the tax is not needed owing to the increases in fuel prices and therefore VAT and duty and I questioned the ethics of reporting this as a black hole in the finances as the revenues are already coming in which far exceed the expected 2p rise. Nevermind eh!

22. At 8:09pm on 16 Jul 2008, CarrotsneedaQUANGO2 wrote:
"Oh yes..

If you vote for me as PM I wont triple VAT.

Now you really are better off.

All is well"


Vote for me and I'll not only not triple VAT, but I'll also reduce crime by not stabbing you!

I think you ask a fair question Nick. However at this point people are hurting so badly they don't really care as long as they
dont have to pay any more tax.

Well, the government could stop wasting money, I suppose, including waste within the BBC. See those little flying pigs?

45 Ilpalazzo, there is a lot of truth in what you say and about everything you say,there is so much unfounded criticism of the labour party on these blogs as the majority of bloggers on here are Tories or members of the [I'm not a tory brigade] ,
They of course are entitled to think and say what they like but most of them go over the top which of course results in those that support Labour retaliating. I am prepared to criticise GB and the government if I think they've done wrong and I have but I am prepared to defend them if I think their right.
Some of the absurd posts on here are beyond the pale, which is sad because like it or not this government is going to run this country for another two years and it doesn't look good on the world stage.They probably think we are going to the soup kitchens for our meals if they believe the Tory rheteric, instead we are the fourth richest country in the G8, so why alll this unnecessary hate and insulting remarks to be used to describe our stting government.

This comment was removed because the moderators found it broke the house rules. Explain.

#41 and #42, personally I am also deeply troubled that we are involved in two military operations, the wars in Iraq and Afghanistan. However, I believe that our government recognises them as simply part of the investment in the 'special relationship' with the US once you strip away the supposed 'humanitarian' reasons for acting.

Personally, I don't know how much in terms of revenue the 'special relationship' is worth although it must be considerable. Therefore, I think you are quite deluded if you believe a change of administration would change that.

#42, I think you need to read about the Nuremburg War trials and the purpose they served. One, they were essentialy there to serve only the victors. Plus, if it wasn't for the Americans they would have never have happened:

- Stalin was in favour of a quick trial in a Kangaroo court followed by swift execution (as this was the Soviet system of the time).

- Churchill wanted summary execution of all SS officers above a certain rank (I think Sturmbannfuhrer).

I'm pretty sure that Nuremburg have provided nothing in terms of precedent. Anyway, I think you'll find Bush and Blair ensured that they acted within the law - by interpretation, of course.

29 - The RAC study was fairly flawed because it included the cost of purchase of a new car. Relatively speaking, cars are cheaper.

If you disregard this kind of one-off cost, and focus on the day to day experience of motorists at the lower end of the food chain, i.e. people who buy a £1,000 car for cash, it is proportionately more expensive.

Petrol - (Above inflation increases due to escalator fuel duty. Nuff said.)

Servicing and repairs – Servicing is needed less often because cars are more reliable, however, many cars now have increasingly complex systems which require sophisticated diagnostic equipment, replacing the man with a good set of ears and a screwdriver. The prices they charge reflect this.
I used to do quite a lot of my own servicing. There is very little I could do on my Focus, due to complex builds and specialist tools / equipment required. It is the garage or nothing.

Tyres - I get more punctures now, because there is more junk on the roads. In the last two years I have bought five tyres, in the ten years before that, I bought seven.
Also, the spec has changed in many cases. On average tyres are wider and deeper these days than cars were 20 years ago. My old MK Escort used to run on tyres that looked almost fit for a Motorcycle. My Focus came with huge LP tyres that retail at £145 each. They are more expensive.

Insurance – Prices now include elements to cover legal expenses, uninsured drivers, vandalism cover and so on. These are new developments and are reflected in the price.

Other - Include in here damage from speed humps, GATSO fees, and so on.
When I was a lad you could park for free almost everywhere. Now you pay virtually everywhere except outside your own house. Some people even then.

Overall, apart from buying the car, running one is more expensive.

#45, Ilpalazzo, yes, I agree with you, I think the government is wrong to lose their nerve and start to scrap green taxes.

I also agree that it would be more effective, fairer and simpler to tax driving rather than the vehicle itslef.

No, the Conservatives haven't, in my mind, come up with any real alternatives (plenty of ideas though) and whilst they're the party (of the two main) who appear to be big on social conscience I'm not sure how long this will last if they do assume power.

You can often judge a political party by those who fund them for obvious reasons - both here and in the US.

As a result of New Labour being so business friendly, the Conservatives still rely on a large amount of their funding from the, let's say, old fashioned side of the party - and I have little, if anything, to agree on with these people.

Now, I shall probably be accused of being a 'New Labour apologist' as I was the other day. Oh well, ironic considering I will be voting for Vince Cable (my local MP) at the next general election (haven't voted Labour since Tony Blair took over).

I don't think comparing the government to parasites is really correct. A parasite will kill it's host it just doesn't always happen. More look at it like mutual symbiosis (which is actually quite aggressive). At the moment we're in a position where one of the party is going to be expelled as the conditions aren't right! I don't know about the real cost of motoring as Private Eye pointed out that rail fares have increased extortionately above the rate of inflation. The current hike in diesel will affect all diesel trains (which are many of the longer distance trains) and will affect all public transport. Also I don't really see much socialism in Labour any more. Most of the policies are close to the Tory policies so blaming socialism doesn't work. Just look at the policy of PFIs and PPPs, not a socialist ideology. I can see why the 2p hold is seen as a tax cut because of inflation (what ever level) which would mean the price should rise but doesn't but at the same time if it costs more to fill up then more revenue is always going to be generated as in a way more 2p in the pound are reached. I don't really know if the Tories would be any better. According to an economics source, two recessions can be attributed to them 1980-1981 and 1991-1992. I think the main problem seems to have been allowing growth (the good times) to get out of hand and it's collapsed the supports. But if we all have to tighten belts then so should government spending. I have to say there are a lot of libertarians out on these boards!

#55 Clarence_Threepwood:

"Overall, apart from buying the car, running one is more expensive"

Oh I see! What wonderful logic!

So overall, apart from buying the food, the grocery bill has gone down? Apart from buying the house, the cost of housing isn't going up very much?

I get the feeling on many blogs and comments and also political commentary that Vince Cable is like a political superhero. To be honest having listened to what he has said many a time on TV and radio he has a far better head than most and is a shame he isn't leading the lib dems. Problem with Labour and the Conservatives (don't forget the mini manifesto from 2006!) is their solution is mainly just money, business and targets. Fuel duty will go up at some point it is inevitable unless you change the whole system (which would probably be a good idea as oil and gas become rarer commodities).

With regard to the 2p fuel tax and the conservative proposals can I have some thoughts on this.

Let's say that people are paying over 110p for their fuel. It is even more but this is an example. So, that is the price when petrol is about $150 per barrel. So, when the price of a barrel falls to, let's say $100 per barrel and the price at the pump should be for arguments sake, 75p per barrel.

So, surely the government should put on taxes so that the price at the pump will be 110p per barrel. We seem to be 'willing' to pay 110p so in order to maintain the efforts to reduce petrol consumption we should pay this price, it will raise taxes but that is surely better than contributing to the profits of the petrol companies.

Oh, and please don't call me stupid for this idea because I think you will find it will be government policy before the blink of an eye, and you read it here first.

#57, Dunky_R, exactly....

X - Y = 0

X = New Labour
Y = Conservatives

#59, Dunky_R, no, not a superhero, he's just my local MP (and a great support to the community), parliamentarian of the year and the most suitable candidate for the role of Chancellor of the Exchequer.

It's frustrating that most people only think in terms of two party politics although there's little to divide them - it's the old fashioned rich versus poor conflict.

The Scots have been very sensible and said no to both New Labour and the Conservatives. I wish we could do the same and actually enjoy a change - for the better.

46 robin jd
Jimbrant doesnt stand alone.
Why should he or any one else give you anything if they did you would still be on here bellyaching about how hard done by you are. you dont realise how lucky you are chum if the Tories get back you will regret the your rather absurd protestations about the labour government unless of course as I suspect you are among the rather well off.
then of course you will welcome the Tax cuts that will be gained by making the rest of us suffer.

45. Ilpalazzo

You said.. Stop telling us what the government are doing wrong, and tell us what the alternative is

Well we know that Labour have and are wasting and squandering billions of tax payers money.

The alternative is to stop doing this.

Interesting

My post 53 refered to a moderator.

All I recall saying was that only nick could state that not introducing a tax was a tax cut.

Oh perhaps i accused him of labour bias too

@63

So GA you dont want a conservative government because its tax cuts will hurt you.

Well I have news for you "chum" the rest of the country dont like the tax hikes that labour have introduced so buckle up my friend you are in for a benefit reduction

And whilst we're on the subject of transport and costs, can we PLEASE have a government (or major political party - you know who I'm talking about "Dave") that will have the nous to come up with a proper integrated transport policy AND deliver it - you know what I mean here:

Fast, REASONABLY priced rail links (both existing and new high-speed lines)

Double-decker trains on the aforementioned new lines (there's no excuse then to say that we can't use double-deckers because of the existing bridges, tunnels etc)

Good bus services which aren't costing the earth for the average person (to cover up the fact that the powers that be are panicking about how they can now afford all those free bus rides for senior citizens)

I know that the powers that be will say "where's the money going to come from?" and "we can't have more borrowing..." but it's funny how we can afford to pay for our army to be involved in two foreign adventures, can pay goodness knows what for aerospace deals with the Saudis and then spend about half a billion on helicopters that can't fly in a light breeze.....

There, I feel better for that now! :-)

58#

Thankyou for your sarcasm.

The point I was making is that the survey includes (a) the cost of buying the car, (and assumes that it is a new one,) and (b) the cost of servicing (and that the servicing needs to happen less often,) hence the main reason for the saving.

(i) Whilst you buy a car only once, you have to run it every day.

Not everyone buys new cars. Many cant afford them, some choose not to. My retired father has had one brand new car in his life. He buys them at 18 months - 3 years old. Until recently I usually chose to run bangers, which is a very cheap form of motoring. I have therefore had one brand new car also, (and probably won't bother again.)
It also occurs to me that the survey did not include the cost of car finance for new cars either, which is much more common than it used to be.


(ii) Yes, new cars need less servicing per miles traveled, but in my experience that servicing is proportionately more expensive, due to the complexity of the car and home servicing is less likely to happen for the same reason. i.e. Engine management systems instead of points.

It is easy to raise revenue without raising taxes, simply put up the national insurance contributions. This would redoubtably help with the ongoing pension crisis too.

As we all know national insurance is not a tax....really.

ah beautiful sensorship

where is my mailnote for post 53 and 65

Although the thesis of the RAC research has become more finely balanced recently, because of the very rapid increase in petrol prices in the last year, it was certainly true a year or so ago when I did the figures to settle an argument in the pub that (despite petrol then at 90p a litre) the cost of car ownership in real terms was lower than it had been 20 years previously, when petrol was 38p a litre. This is because the cost of the fuel is only part of the picture.

The RPI now (June 2008) is almost exactly double the 1988 figure (216.8 /106.6) so petrol has indeed gone up faster than RPI.

However, while petrol has increased as a share of the total cost of ownership, other elements have become cheaper.

In real terms cars are cheaper to buy, maintain and insure and more reliable than they were in the 1980s. They are also more fuel efficient. And these lower costs outweigh the headline petrol price figure.

Compared to incomes the case is incontrovertible, because mean earnings have gone up much more than RPI since 1988 (about 580 / 218, or almost as much as petrol). So more people can afford to run a car as these costs are a smaller part of their total disposable income. The total number of vehicles on our roads grew by 46% in the last 20 years, from 23.3 to 34.0 million, and nearly 80% of households now have at least one car.

Also, just because many people no longer trust any official or semi-official statistics that don't support their preconceptions, this doesn't make it less true. Facts are independent of belief.

BTW

I always thought that a parisite is someone who lives in Paris!

I really dont get it Nick

How can not introducing a tax ever be seen as cutting tax.

If the tax didnt exist in the first place how could it be reduced.

The 2.7 billion is a cut but only to compensate people for the already introduced tax hike caused by removing the 10% rate. The 4 million people that will still be worse off due to this will find it funny that you think this is a tax cut. I think Grandantidote may well be one of these that are worse off as a result. I am pretty sure Jimbrant will be in this bracket as well.

What annoys me is that Brown claims that what he is doing by postponing the increase is helping us whilst we struggle with food and fuel costs.

However, in reality, not increasing a tax is no help at all. Nothing is getting cheaper or easier and belts must continued to be tightened.

When he says he is helping what he means is that he is not going to conspire on this issue to make things harder!

#67

I'm one of the many over 60s who is also overweight and has a "free" bus pass. What a brilliant incentive to exercise more! I'm now wondering if I'll live long enough to be offered the new one-on-one free councilling sessions which will be introduced to help me cut down on bus travel.
It should not be beyond the abilities of our government to use a bit of joined up thinking and either target the elderly who NEED help with paying for travel or make sure that the elderly have enough money to decide for themselves how to spend it.

63. At 12:59pm on 17 Jul 2008, grandantidote wrote:
46 robin jd
Jimbrant doesnt stand alone.
Why should he or any one else give you anything if they did you would still be on here bellyaching about how hard done by you are. you dont realise how lucky you are chum if the Tories get back you will regret the your rather absurd protestations about the labour government unless of course as I suspect you are among the rather well off.
then of course you will welcome the Tax cuts that will be gained by making the rest of us suffer.

-------------------------------

A good old school 'us' and 'them' debate, that's what the Labour Party needs after doing it with such success in Crewe!

72 potkettle, That would suggest that even as you think that this government is doing so badly you are doing quite well .

Any extra revenue gained from high energy prices is already built into the budget.

When 'Morning' Darling was planning how much he'll have to spend, he (or rather, his team) will have factored in the impact of oil market trends on tax revenues.

They'll also have been expecting to gain from the 2% tax increase on fuel and planned to spend accordingly.

Hence it's a fair question; either spending needs to be cut or another tax raised.

I think attacking Nick for calling it a 'tax cut' is misguided - to be pedantic, you could replace it with 'this will have to be funded, like a tax cut'.

66 pot kettle ,Youve got me wrong my friend I dont like conservative policies full stop.
The difference between tory tax cuts and as you call it Labour tax hikes is that Tory tax cuts invariably means that the more well off are the ones that benefit by having more money in their banks whereas the so called labour hikes go to pay for better schools better hospitals etc.

In #71 badgercourage said "Facts are independent of belief".

While true, he quotes statistics, and statistics are in the "Lies and damned lies" category.

A quick search of the internet reveals that "The CPI levels have also been rebased to 2005=100 from 14 February 2006. The rebased series replaced the previous series, based on 1996=100".

Take something out of context and it is no longer necessarily a fact.

75 laugh on, Yes your absolutely right people do need to be reminded of their roots and what the Tories have done to the working classes for the last sixty years.
If you think you know, then let me know what the Tories have done for the working man and tell me how many Labour policies that have advanced the lot of the lower paid, the Tories have voted against.
Forget Crewe one swallow doesn't make a summer.

73 laughon, Unlike the Tories who had the fuel escalator which fortunately Labour got rid of with out hesitation.
If labour hadn't taken action over the 2p then that would be something for you to moan about, so they have postponed it indefinately and now you have that to moan about . Thats real joined up Tory double speak of the kind that we have come to expect on these Blogs.

#80

"Forget one Swallow doesnt Make a summer"

Unfortunatly one wrong swallow can make you choke and die!

Although i would be interested in the list from both parties, because i generally find with both the political parties, one in power they give with one hand and take with the other. Im just of the opinion now that Labour have been in power far too long, and they could benefit from a stint in opposition. Often taking a break from the situations means you come back with fresh ideas, and solve things better.

Tories may not be any better, but the current bench is untested, and before anyone starts harping on about the past, people learn from mistakes, and unless given the benefit of doubt when they say they have, we may as well scrap and rehab system that exists. Also for that matter labour should not have won in 1997 on the same logic because you could quite easily drag enough mistakes up on the current lots past, but they were rightly given the benefit of doubt by the majority. It worked for a while, but like with all things a step back and rest freshens your abilities.


Ta

#68 Clarence_Threepwood:

"Thankyou for your sarcasm"

You're welcome. I don't use it often, but sometimes the temptation is irresistable.

You seem to be claiming that the RAC study is faulty because it includes all the costs of owning and running a car. You will forgive me if I think that's a sensible basis on which to make this sort of assessment. And of course they are looking at an average situation, not one that applies to every individual

@76

Yes thanks the 10% tax change made me better off and they also are giving me the compensation payment.

@78

See my previous post.
Labours hike missed the target with their last debacle.

They cant even get tax the rich policy right now

81. At 2:32pm on 17 Jul 2008, grandantidote

------------

You have me all wrong. I'm not moaning about Labour not increasing taxes at this time. I do, however, take affront to the claim by Brown that he is helping.

Not kicking me when i'm down is not that same as giving me a helping hand!

And when you say "people do need to be reminded of their roots and what the Tories have done to the working classes for the last sixty years" you seem to forget that Labour were in charge for around 30 of the last 60 and, more importantly, have been running things for the last 11 years!

#71 badgercourage: "Also, just because many people no longer trust any official or semi-official statistics that don't support their preconceptions, this doesn't make it less true. Facts are independent of belief."

Careful, you will be labelled a parasite yourself if you continue to harbour such revolutionary ideas.

Crime is down almost 50%, and yet people are convinced that it's going up. Perhaps today's Daily Mail headline 'welcoming' the very good statistics is one reason for this:

"Shock figures reveal no part of Britain is safe as knife violence spreads EVERYWHERE".

Blair and Campbell wre undoubtedly right - our media are a large part of the problem, and not part of the solution, of public misconceptions. This is strange in view of the fact that by their own admission they are the best in the world.

One more question for you antidote.

Why do you equate less spending with cuts in service?

There is no direct causality link between the two

There is plenty of waste built into the system. Its time Lean methology and Sigma quality levels were introduced to the public sector. Those ways of working have turned many a company around since Motorola first employed them in the late eighties.
What is more the beneficiary is the customer/user of the service and the company providing the service.

Great news that NewLabour have been outed on the ridiculous charge of 'where's the money going to come from?'

In saying this they are admitting they have bled the beast dry and there is no more money.

So all this about tory tax cuts is faintly irrelevant. The country needs managing and this government couldn't manage its way out of a paper bag.

I've finally worked out something NewLabour have done with the money; they blew up asset prices with easy credit, overinflated the housing market so no-one could afford to buy and now they're buying back unsold property from developers with our money, then this is resold at a discount for social housing. This sounds like something from a comedy sketch but it's the sad reality of the NewLabour dystopia.

More money, more waste and more taxes. Constantly robbing Peter to pay Paul. No idea what they are doing or where they are going. (except out of office at the first opportunity)

#79 andyjenk:

"The CPI levels have also been rebased to 2005=100 from 14 February 2006. The rebased series replaced the previous series, based on 1996=100".

And what sinister conclusion do you draw from that? Statistical series are often re-based to make them easier to handle. It doesn't stop anyone comparing across such discontinuities by using a simple arithmetic adjustment to one or the other series. The RPI has been re-based a number of times since the war.

#88

The reason they relate the two (well in political parties) is because to suggest they could save money by removing waste in governement run sectors, would give out headlines of imcopetent running of departments and be political suicide. The only time you can really do it politically free is at the beginning of the adminstration where its all the previous administrations fault. If Brown were to admit it now it would all look like his fault because labour has been in power for 11 years.

It may not even be his fault in some areas, but hes scared of the press, just like all politicians.

The sooner the press gets reformed, and made to reports facts as facts without spinning them to suit their editors political agenda the sooner people will see what truely is a cock up or just hype. Then at a complete longshot maybe they will make policy decisions based on sense not what will catch headlines.

Theres those pigs again

# 79

a) "A quick search of the internet reveals that "The CPI levels have also been rebased to 2005=100 from 14 February 2006. The rebased series replaced the previous series, based on 1996=100".

I deliberately used the RPI which is more reliable, less political that CPI has a continuous series going back well before 1988. In any case, although rebasing series is often done to obscure this is not always the case. And so long as you have the raw data the accuracy can always be checked.

It is the (mis)use that statistics are put to by politicians and others that is the problem, not the statistics - which don't care either way, in the same way that money is never happy or unhappy.

Darrell Huff, a famous American statistician, put it aptly: "He uses statistics as a drunk uses a lamp-post: for support, not illumination".

b) "Take something out of context and it is no longer necessarily a fact. "

Illogical, Captain. It's still a fact; it's only the implications, interpretation and understanding that change.

Ands none of this challenges my point. The RAC are right and the posters who challenge these facts are wrong, or to be charitable are extrapolating in an unscientific way from individual circumstances and anecdotal examples.

83

As a general principle I find that people who resort to sarcasm do so because they know they are on a sticky wicket.

What I am saying is that the survey is faulty, because it is predicated around the purchase of a New car, not a second hand one.

I conceed that new cars are proportionately cheaper, hence the reduction in the headline figure.

A more accurate cost comparason would be one that examines running costs only as a proportion of average income.

#87

The Daily Mail wouldn't know a fact if it slapped them with a kipper. the are only insterested in scaring people to sell newspapers.

They are only part of the problem because our cowardly politicians (including and maybe especially Blair and Campbell) have pandered to their prejudices and those of other similar "newspapers" in order to win their support.

I heard that GB et al have decided not to announce anything further about the proposed VED until the autumn, which, as a BBC reporter said, would give the public time to sell their cars and give the government more "wiggle room".

Want to buy a five year old Citroen Picasso with nearly 80,000 miles on the clock then, Gordon? No, I didn't think so.

# 93

"What I am saying is that the survey is faulty, because it is predicated around the purchase of a New car, not a second hand one."

Unfortunately, this is wrong: it's based on a survey of the money paid by car owners of all types to run their vehicles, not the price of new cars.

https://www.rac.co.uk/web/report-on-motoring/report-one/

"A more accurate cost comparason would be one that examines running costs only as a proportion of average income."

As I pointed out in my first post (#71) comparing running costs to average (mean) income makes the case even more strongly, as average income has gone up faster that the RPI or other measures of economic activity since we have had growth under all governments since 1988, and total tax take as a % of income has remained broadly constant.

So even if the cost of motoring had stayed static in real terms, the proportion of income needed to run a car would have declined - which is part of the reason car ownership has increased to almost 80% of households now compared to 62% in 1986. "The fruits of economic growth".

#90:

Not reading anything sinister into it. Just illustrating how wrong impressions can be generated.

On the subject of statistics, perhaps someone can enlighten me as to how Average Annual Earnings are calculated, though.

Using simple averaging, if 90% earn £14,000 pa. and 10% earn £230,000 then the average Annual Income is £35,600 whereas if 99% earn £14,000 and 1% earn £230,000 then the average Annual Income is £16,160.

Is this the system used? If not, what is? Surely it is how much the average person earns that is important (in the above example, the same amount).

# 90

RPI, CPI, whatever ... the problem is that these are indexes that the Government has a vested interest in.

So, the index components are carefully chosen.

Back in the real world of most folks, the excellent financial team lead by Ian Cowie at the Torygraph have pulled off a great coup by creating their own index, the Real Cost of Living Index (RCLI).

Which actually includes things that the Government would rather were left out e.g. mortgage interest payments, Council Tax bills and so on.

Their Real Cost of Living Index is currently about 10.6%.

Now there is a number you can believe.

#86 laugh-on, you claim that Labour have been in charge for the last 11 years and are technically correct.

You do, however, forget something.... the word 'New' and the man Tony Blair who was more like Thatcher than Margaret Thatcher herself. I'm not surprised she's getting a state send-off, the government love her so much that they decided to carry on her legacy.

#87, jimbrant, yes, although I bet they made it quite clear to Rupert Murdoch that they weren't referring to any of his interests when they said that. I think their assertion stinks of hypocrisy but then we're talking about politicians.

I think we do have some very fine media institutions in this country, however, they unfortunately attract relatively little interest..... and I'm not referring to the Daily Mail and General Trust plc when I say that!

Are our media institutions the best in the World? I think that's certainly open to interpretation.