Fuel Duty regulator
The Tories have now come up with their proposals for a fuel duty regulator, a policy repeatedly trumpeted by the SNP as a solution to all our woes.
The absence of detail - from either the Tories or the SNP - makes it hard to judge the effect of the policy, but the claim by George Osbourne, Shadow Chancellor(and a former oil trader) about their policy...
Perhaps Mr Allan or Mr MacNeil would let us know how much their proposals would save? Although I suspect they are mouthing a policy they do not understand and which is desperately in search of an intellectual and economic foundation. Otherwise Alex Salmond (former economist) would surely be explaining exactly how it would work.
As previosuly mentioned, the impact on duty claims by fishermen and bus operators would be horrendous. But leave that aside for the moment.
But there is another side to this policy.
If fuel duty falls when the oil price is above a certain point (so as to give the same yield to the Treasury), then perhaps Mr Allan or Mr MacNeil - or even Mr Osbourne - could enlighten us as to what that base yield is to be. Just what is the starting point?
Let us just say it is £1 per litre and whatever yield that gives.
So what happens if petrol prices fall below that point?
Why pump prices don't go down very quickly, as the deadening effect of the regulator preserves the yield to the Treasury by keeping prices artificially higher. Ooops. This might explain why the specifics are slow in being forthcoming.
The real issue is - of course- dependency on oil. As in the 1970's a price shock should be causing us to fundamentally review how and why we are dependent on fossil fuels which have a limited lifespan.
Pandering to the every whim of the electorate in the short-term leads to long-term problems. Whether that is in dealing with education in the Western Isles or ignoring energy issues, the blame lies fully with the politicians who are more interested in protecting their job and benefits than in doing what is best for the communities they represent.
The absence of detail - from either the Tories or the SNP - makes it hard to judge the effect of the policy, but the claim by George Osbourne, Shadow Chancellor
If the system had been introduced in the 2008 Budget, fuel would currently be 5p cheaper.Gives you some idea of the utter modesty of the proposal.
Perhaps Mr Allan or Mr MacNeil would let us know how much their proposals would save? Although I suspect they are mouthing a policy they do not understand and which is desperately in search of an intellectual and economic foundation. Otherwise Alex Salmond (former economist) would surely be explaining exactly how it would work.
As previosuly mentioned, the impact on duty claims by fishermen and bus operators would be horrendous. But leave that aside for the moment.
But there is another side to this policy.
If fuel duty falls when the oil price is above a certain point (so as to give the same yield to the Treasury), then perhaps Mr Allan or Mr MacNeil - or even Mr Osbourne - could enlighten us as to what that base yield is to be. Just what is the starting point?
Let us just say it is £1 per litre and whatever yield that gives.
So what happens if petrol prices fall below that point?
Why pump prices don't go down very quickly, as the deadening effect of the regulator preserves the yield to the Treasury by keeping prices artificially higher. Ooops. This might explain why the specifics are slow in being forthcoming.
The real issue is - of course- dependency on oil. As in the 1970's a price shock should be causing us to fundamentally review how and why we are dependent on fossil fuels which have a limited lifespan.
Pandering to the every whim of the electorate in the short-term leads to long-term problems. Whether that is in dealing with education in the Western Isles or ignoring energy issues, the blame lies fully with the politicians who are more interested in protecting their job and benefits than in doing what is best for the communities they represent.
19 comments:
"...politicians who are more interested in protecting their job and benefits than in doing what is best for the communities they represent."
Kinda like all those on the Comhairle who voted in favour of the Windfarms despite the overwhelming contradictory views of the communities they represented?
No Anon
Doing what is best for the communities
Not for a minority group who only want to protect the equity in their holiday homes rather than benefit the community or the islands
The Automobile Association have welcomed the proposed changes in fuel duty calculation.
But, of course, Angus Nicholson is more of an expert than the AA.
Anon 9.47 - The AA and the Tories line up to pollute the planet and you think the SNP are right to support them?
Anon 9:47
Do you think 5p per litre makes the slightest difference?
It is a desperate attempt by Allan and MacNeil to get headlines not a serious attempt to do anything to benefit us.
Anon 9.47
AA welcome any reduction in petrol prices. Wow, that's real news.
Pandering to the 4x4 owners.
9:47 my brother's name does not have an "h" in it
Theres nothing new in what you have said here Angus. Yes there would have to be a base yield. So what?! Fuel duty would not be unique in having a complicated threshold system. You of all people should know that. And ao you really expect Oil prices to fall again? If so you must be the only person in the world. Another cheap shot. Lots of words. No substance. Making difficulties where there arent any. Just to have a go at the usual suspects.
Anon 5:11 - I expect oil to briefly reach $200 in the Autumn/Winter and then drop to perhaps $40-$60 over the next two or three years before probably levelling somewhere between $50-$100 for a few years.
Therefore the choice of a 'regulated' petrol price is significant. If oil is not going to drop in price then a regulatory mechanism is totally irrelevant as we better adapt our economy to the new prices.
But more significant is that I think the world has to start planning now for a post-oil planet and that means modifying our dependence on a fuel source with a very limited life.
The Duty Regulator will not affect the yield significantly as we are now starting form a much higher total yield. Compensatory measures should NOT be the general reduction of prices to encourage more demand but targeted support to the affected communities.
George Osborne a former oil trader? His biography says that he got a degree in modern history and, after a short spell as a freelance journalist, joined the Conservative Research Department aged around 22.
Sorry, you are right. It is Alan Duncan I was thinking of.
Are you really saying that having reached $200 per barrel you then expect it to settle somewhere between $100 and $150 per barrel LESS THAN THAT in the future. A reduction of between 50% and 75%.
Methinks its you who is out of your depth with this one.
No chance.
Anon 9:37
Let's have the benefit of your wisdom then
Quick to criticise but not so quick to offer a semi-coherent comment
If you believe it will stay at $200 per barrel then will 5p/litre make the slightest difference?
With oil at $200pb petrol will be at least £2/litre, and domestic heating oil will be almost too expensive to use.
Time, of course, will tell which of us is right; but I believe oil will briefly peak at $200 as someone, somewhere, tries to become the first to buy a barrel at that price.
As they say, if you laid all the economists in the world end to end you wouldn't reach a conclusion.
If you believe it will stay at $200 per barrel then will 5p/litre make the slightest difference?
With oil at $200pb petrol will be at least £2/litre, and domestic heating oil will be almost too expensive to use.
Time, of course, will tell which of us is right; but I believe oil will briefly peak at $200 as someone, somewhere, tries to become the first to buy a barrel at that price.
As they say, if you laid all the economists in the world end to end you wouldn't reach a conclusion.
If you believe it will stay at $200 per barrel then will 5p/litre make the slightest difference?
With oil at $200pb petrol will be at least £2/litre, and domestic heating oil will be almost too expensive to use.
Time, of course, will tell which of us is right; but I believe oil will briefly peak at $200 as someone, somewhere, tries to become the first to buy a barrel at that price.
As they say, if you laid all the economists in the world end to end you wouldn't reach a conclusion.
Kenneth 12:45
This is the SNP's vague attempt at humour. They deliberately spell Angus' surname with an "h" as this was the spelling they (stupidly and wrongly) used when they expelled him. For any life-long SNP supporter it showed how little they valued this support.
Don't worry, it's not worth lowering oneself to their level, if this is the extent of their humour and (lack of) intelligence.
Anon 9:59 Im not the one with a blog spouting about oil prices. Angus is. I dont have to give any opinion but I am entitled to say his is wrong.
Angus, I never said it would stay at $200/barrel. I just pointed out that your prediction was well..not likely to put it mildly.
As for the £0.05/litre. You are basing your arguments here on second hand Tory details. Lazy politics. You obviously havent thought this out much more than anyone else.
it was a.c, actually, 10:03
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