Petition for fuel cost reduction

wongataa

Grey_Critic said:

I note oil yet again has dropped in price today.

Would be much better if the government were to make the suppliers reduce their prices with as much speed as they raise them.

Not going to happen.  The petrol stations buy the fuel at the higher price and then are forced to sell it for less than they bought it for?  Are the government going to subsidise this?

iwb100

Ebe_Scrooge said:

A lot of these petitions seem to me to be ill-thought-out.  Don't get me wrong, as a motorist who has little choice but to use a car, due to living in a rural location with little to no public transport, I hate the current price of petrol as much as anyone else.  Hopefully things are showing some signs of easing on that front - fingers crossed.  And yes, the motorist is often seen as an "easy target" for taxation.

But the government gets millions (billions?) in revenue from fuel duty.  If it takes a 40% cut on that income, where is the shortfall going to come from?  I don't know the figures, but I'm willing to bet that the whole Covid thing has cost a pretty penny, and that's got to be repaid somehow, on top of all the usual spending.

Of course I'd like to pay zero tax, wouldn't we all.  But realistically, "running the country" has to be paid for.

Not meaning to argue with you - but it's worthing sparing a few minutes to think through the wider implications of things like this, rather than just giving a knee-jerk reaction to the headline statement.

Discuss .......  

Why do people consider the UK economy as though it’s a household economy? We don’t have to repay borrowing. We just keep borrowing. Public sector debt has risen every single year for about 15 years plus consecutively. Indeed I think we’ve only had a surplus for about 3 years in the last three decades. A household has fixed income whereas an economy does not and spending cuts lower the income so it’s simply not analogous. 

So as a country we continue to spend way on excess of GDP yet none of that spending improves lives. That’s the scandal for me. We aren’t spending money to make people have better lives. It’s mental when you think about it. 

Sandtree

iwb100 said:
Why do people consider the UK economy as though it’s a household economy? We don’t have to repay borrowing. We just keep borrowing. Public sector debt has risen every single year for about 15 years plus consecutively. Indeed I think we’ve only had a surplus for about 3 years in the last three decades. A household has fixed income whereas an economy does not and spending cuts lower the income so it’s simply not analogous. 

So as a country we continue to spend way on excess of GDP yet none of that spending improves lives. That’s the scandal for me. We aren’t spending money to make people have better lives. It’s mental when you think about it. 

Yes we do, most debt is raised by the issuance of gilts which pay coupons/interest every 6 months until they expire at which point the principle has to be repaid and if you look at the Debt Management Office they claim they have never once not paid the coupons or principle on time.

Part of the difference is that many gilts are long dates, looking at this years auctions they've had some that aren't due to be repaid until 2071 and we borrow multiple times per month, in part to repay the principles that have become due (see https://www.dmo.gov.uk/data/pdfdatareport?reportCode=D5D). The basics are the same though, the more you borrow, the more of your income has to go towards debt servicing.

You are however certainly correct that the economics are much more complex and there are conflicting different economic theories. There are argument that borrowing at low interest rates to invest in infrastructure will increase productivity and so increase tax and ultimately enable repayment.

Jenni_D

wongataa said:

Grey_Critic said:

I note oil yet again has dropped in price today.

Would be much better if the government were to make the suppliers reduce their prices with as much speed as they raise them.

Not going to happen.  The petrol stations buy the fuel at the higher price and then are forced to sell it for less than they bought it for?  Are the government going to subsidise this?

What about the stations that increase the price (on what seems an almost daily basis at the moment) - even though they're still selling existing stock and haven't paid an increased cost for it?

TooManyPoints

And what tax are you proposing to increase to compensate?

Could always think the unthinkable and spend a little less. For example, the UK has an "Overseas Development" budget (aka Foreign Aid). Some of this is going to China (the second largest economy in the world) and India (which can afford its own space programme). Both of these countries are providing tacit assistance to Russia. So, we provide aid to China and India, they in turn provide assistance to help the Russian onslaught in Ukraine, the Ukrainian people have to up sticks to get away from that, some of them make their way here and the UK government has to pay £350 a month to people who let them live in their spare rooms (not to mention the benefits and costs of services they are eligible for upon arrival). The last time I looked this "Overseas Development" (a misnomer if ever there was one) cost the country £14bn.pa.

Not going to happen.  The petrol stations buy the fuel at the higher price and then are forced to sell it for less than they bought it for?  Are the government going to subsidise this?

They did that with the domestic energy "price cap". That worked well, as I recall. Unless you were with one of the dozen or more providers who ended up doing exactly that and went to the wall.

Herzlos

iwb100 said:

Why do people consider the UK economy as though it’s a household economy? We don’t have to repay borrowing. We just keep borrowing. Public sector debt has risen every single year for about 15 years plus consecutively. Indeed I think we’ve only had a surplus for about 3 years in the last three decades. A household has fixed income whereas an economy does not and spending cuts lower the income so it’s simply not analogous. 

So as a country we continue to spend way on excess of GDP yet none of that spending improves lives. That’s the scandal for me. We aren’t spending money to make people have better lives. It’s mental when you think about it. 

The UK is presumably paying some interest costs on borrowing even if it's tiny. Thus if the borrowing increases annually at some point the cost of the borrowing will meet the economic income and then we're all stuffed.

It's in everyones interest to pay the debt down eventually.


As for the fuel costs, as mentioned already I'd rather we did something about the huge increase in home energy costs. People can choose not to drive as much (or as fast), but they have little choice in paying for heating/electricity given the worst of the increase is in the standing charge which needs paid even if you're not running anything.

I'd be putting any extra tax on luxury items (a small VAT increase, for example), and potentially have any car tax tied to the list value.

TooManyPoints

The UK is presumably paying some interest costs on borrowing even if it's tiny.

Just a tiny bit.

Total government debt at the end of October last year stood at £2.27 trillion. That is £2,270 BILLION or 227 followed by ten noughts. The government is currently paying around 2% pa to service this debt (because people don’t lend them money for nothing) and this amounts to an annual cost of around £45bn. To put this into context, this is about a quarter of the health budget, half the education budget, a little less than the defence budget(£52bn), more than that for Public Order & Safety (£35bn), more than that for Housing & Development (£32bn) and more than that for transport (£37bn).(These are 2019-20 budget figures so as to avoid distortions caused by the pandemic).

We don’t have to repay borrowing.

Perhaps the above will give you some idea of how that is not true. Even if you don't repay the principle, you have to pay the interest (or people will no longer lend you money) and eventually that interest becomes unsustainable. It may not be entirely analogous to compare the country’s economy with a household budget. But they have their similarities. The principle difference is that, when considering the economy,  it takes a little longer for the excrement to hit the air conditioning. But it does in the end.

JustAnotherSaver

DB1904 said:

I can't see it happening, they've brexit, covid and the Russian conflict to pay for. Talk of petrol being £2-50 a litre this morning. Boris isn't going to miss the opportunity to tax the working person. 

It was only a fortnight ago I was getting laughed at for saying I think it'll hit 2.50.

Car_54

iwb100 said:

Ebe_Scrooge said:

A lot of these petitions seem to me to be ill-thought-out.  Don't get me wrong, as a motorist who has little choice but to use a car, due to living in a rural location with little to no public transport, I hate the current price of petrol as much as anyone else.  Hopefully things are showing some signs of easing on that front - fingers crossed.  And yes, the motorist is often seen as an "easy target" for taxation.

But the government gets millions (billions?) in revenue from fuel duty.  If it takes a 40% cut on that income, where is the shortfall going to come from?  I don't know the figures, but I'm willing to bet that the whole Covid thing has cost a pretty penny, and that's got to be repaid somehow, on top of all the usual spending.

Of course I'd like to pay zero tax, wouldn't we all.  But realistically, "running the country" has to be paid for.

Not meaning to argue with you - but it's worthing sparing a few minutes to think through the wider implications of things like this, rather than just giving a knee-jerk reaction to the headline statement.

Discuss .......  

Why do people consider the UK economy as though it’s a household economy? We don’t have to repay borrowing. We just keep borrowing. Public sector debt has risen every single year for about 15 years plus consecutively. Indeed I think we’ve only had a surplus for about 3 years in the last three decades. A household has fixed income whereas an economy does not and spending cuts lower the income so it’s simply not analogous. 

So as a country we continue to spend way on excess of GDP yet none of that spending improves lives. That’s the scandal for me. We aren’t spending money to make people have better lives. It’s mental when you think about it. 

So, spending on NHS, care, education, policing etc. doesn't improve people's lives?

If it wasn't for state spending on education I'd have been illiterate. And without the NHS I'd be dead.

Sandtree

Car_54 said:

If it wasn't for state spending on education I'd have been illiterate. And without the NHS I'd be dead.

So you are saying it's borderline?