Fuel Duty – Government shooting itself in the foot?

Dave Roberts
Chef / Owner
Caveau
Blogger
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People (and the FSB) tell us that there are some 4.5m businesses like mine and yours in the UK and that, us small businesses account for 99% of all enterprise in the UK, plus nearly 60% of all private sector employment and 49% of all private sector turnover!

Now I’m far from an economist, I don’t work for a think tank, political or otherwise, and I have no shares in Oil or Petrol companies but for the life of me, as someone that thinks he is fairly representative of 99% of all private business in the UK, I can’t see why the government is pressing ahead with the proposed fuel duty increases?

With VAT at 20%, even without Fuel Duty increases, the government coffers gets an extra 2.5% of the increase to fuel prices since the VAT rise, and with diesel beating its previous all time high of May 2011, and petrol only 2.5p of its all time high, there isn’t any shortage of increases to tax revenues from fuel just through the price rises and current duty levels.

So then, one question first of all, is where are all the fuel protests this time? Are we now so demoralised and apathetic we can’t muster a bloody good protest? Or are we so disenfranchised that we know deep down, any protest wouldn’t make a blind bit of difference to the views of our government? Sadly I suspect the latter.

But whether I am right or wrong economically speaking, surely as with any product, its price does have a bearing on its attractiveness and subsequent sales levels, even with fuel? And considering fuel costs are not just about what we as consumers pay at the pumps but what our retailers and suppliers face in getting food, goods and other items to our homes, shops and businesses, what taxi drivers face and bus companies face in ferrying us round, and what the sales forces and employees of 99% of all UK private business face, then surely there is a tipping point at which the price will become prohibitive to use?

Now as I mentioned, I’m no economist BUT if fuel costs are so intertwined in all aspects of our economy, our own small businesses and what money (if any) we have left to take home each month, surely anything that doesn’t stimulate the economy is a cancer to our economic recovery?

At my business, I order in lots of produce from a number of local suppliers and although they have in some instances put up their costs, times are tough for them and they are reluctant to just keep on passing the cost hikes onto their customers and for that I admire them. They have seen the relationship between price and popularity, so why hasn’t the government? That they (my suppliers) have to lay off staff as part of their cost stabilising/cutting exercise is also going to be counterproductive to the economy as a whole, in that more and more people will become tax burdens not tax payers.

There is an old saying and whilst fuel purchases won’t stop altogether they are declining (and have been for over 12 months) and as such you have to look at the governments anti-business sentiment and say:

“Surely a smaller percentage of something, is better than a larger percentage of nothing”

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