First on the list, the rising cost of petrol, I don’t drive but the last I heard it was about £1.15 ($2.30) a litre. Now it is all very good our Prime Minister going cap in hand to the Saudis Oil Barons and beg for them to increase production, but I think we should look a little closer to home first.
Now every budget in recent years, in fact, as long as I can remember includes an increase in fuel duty, two pence here, a penny there etc…
Around 70% of the price of petrol in the UK is fuel duty. Meaning that if Mr Brown really wanted to ease the pain for the Millions of drivers, whom he says he “feels” for he could easily make his feelings felt, and cut the cost of fuel duty, so that we all “feel” how much he “feels” for us, because the true cost of fuel is about 46p per litre (Pre VAT/Tax/Fuel Duty) which is actually cheaper than a similar quantity of Mineral water.
The same applies with Gas and Electricity prices, a few years ago the government themselves bumped up the cost of Gas and Electricity by adding 5% fuel duty. With the large price rises seen since this was added, the Government are collecting even better revenues.
Think of it like this, if the price of electricity or gas was £100 per unit when the government started adding tax, the government then come along and add 5% tax meaning you end up paying £105 per unit, with the government taking £5.
Now, say the price per unit went up by 20%, and the cost in fuel in recent years has probably far exceeded this amount, but for our example, the unit cost is no £120, the government have not changed the tax rate, so 5% tax still applies, but due to the increase in price, the amount of tax the government take is going to go up as well. So instead of the government only taking £5, with the 20% increase in unit cost, the amount of tax they take goes up by 205, so Mr Brown and his government are now taking £6.
The only issue with lowering one tax, it means Mr Brown will have to replace it from somewhere else!
Time for a revolution I thinks, at least a social and political revolution!