Fuel duty rise deferred

26 Mar 2010

No 3p petrol duty increase on 1st April - instead it will be 1p, with the rest phased in after the election. Undoubtedly rising petrol prices will increase inflation, but we cannot soften the blow of rising oil prices through the tax system. Oil is running out - or hadn’t you heard? Yes, we may be able to get it from tar sands, from corn or from beneath distant oceans, but it is still running out and as we attempt to mop up the last resources it will get more and more expensive.

Should we encourage people to use less oil by pushing the price up? In the long term that may work, but in the short term it will make life difficult for many “hard-working families” and most other people as well. Few can afford a £20,000 electric car; fewer still can find anywhere to charge it. Will there really be a significant number of buyers prepared to put up with a range of only 100 miles?

Taxation is always a blunt instrument, and never a substitute for policy. Instead of arguing about petrol we should be debating the whole transport and mobility issue. Instead of reserving £30bn for new high-speed rail links across the country shouldn’t we be looking at  the millions of shorter journeys that millions of people make every day? Considering how video links and high-speed broadband can reduce the need for travel? Planning to increase home working? Questioning  why our lifestyle and working patterns demand more and more travel?

[Written on a train]