Pounds to the pump: the taxes on motorists are excessive
It simply isn’t fair that UK drivers pay some of the highest fuel taxes in the world, and the highest in the EU
Anyone who drives will be aware that filling up is pretty pricey these days.
Such is the pressure on drivers’ wallets that the allure of supermarkets offering 1p off a litre of fuel is enough to cause a traffic jam in surrounding streets.
But what many politicians in Westminster don’t seem to be aware of is how disproportionately hard those in the suburbs and rural areas are being hit by tax on petrol and diesel.
Many car users outside urban areas don’t have a choice about whether or not they drive. If you are a smoker and you’re on twenty a day you will pay more in taxes on tobacco than a smoker who is only puffing on ten a day; simple. That’s hard enough, but you will always have the choice to simply give up if taxes on tobacco become prohibitively high.
The same is not true of driving if you live in a sparsely populated area. However optimistic we want to be about public transport, the simple fact is that people need their cars.
In most parts of the country there just isn’t another practical option, people need to drive to get to work or to take their children to school. Despite Fuel Duty being set nationally it is affecting motorists in each local authority area very differently (see how in our report here).
In March of this year the Government came over all generous and announced a 1p a litre cut in Fuel Duty. Ed Balls scoffed that "the idea that drivers around the country should be grateful for a 1p cut in Fuel Duty when George Osborne's VAT rise is adding 3p to the price of petrol is laughable".
Drivers are rightly concerned that this was merely a sweetener for motorists and not the start of a general shift away from the trend of higher and higher taxes on fuel.
Even without the VAT rise (you pay VAT on Fuel Duty too – that’s right, tax on tax) motorists would be being taxed excessively. They pay Vehicle Excise Duty (that’s the tax disc you buy for your car) and Fuel Duty, and both of these at their current rates cannot be justified by the cost of road building or the social costs of driving – like the cost of emissions.
When I first started showing people our new Tax Buster smartphone app, one of the most shocking features was the one that displayed the taxes on fuel.
For example, filling the car up with £60 of petrol would have only cost £23.86 without indirect taxes. And paying the £60 required £104.84 in earnings before income and corporate taxes are taken into account.
The app allows drivers to see, at the touch of a button, the extent to which taxes increase the amount they need to earn to afford the fuel they buy. The most common reaction from drivers was a feeling that they are being ripped off and hit unfairly hard.
On Tuesday MPs will debate the rate of Fuel Duty in the House of Commons. The vote was triggered after more than 100,000 people signed an online petition calling for cheaper petrol and diesel.
The strength of feeling on Fuel Duty is palpable. We want to see George Osborne bring in at least a freeze over the course of the rest of this Parliament, to ease the pressure on struggling motorists who have to use their cars.
It simply isn’t fair that UK drivers pay some of the highest fuel taxes in the world, and the highest in the EU.
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