Just Stop Oil... price hikes?

The Just Stop Oil/ XR people don't understand science, but fair enough, they are at least intellectually consistent from there on in. They do shit like gluing themselves to road surfaces to piss off motorists.

For some reason, some people whose interests are diametrically opposite have adopted a similar rolling roadblock tactic.

If you were stuck in the queue behind all this, how would you know whom to rail against? The climate idiots or the tax idiots? (The recent price rises are apparently due to lack of refining capacity, which in turn are partly due to 'green' policies, and little to do with changes in fuel duty?)

Also, I'm looking forward to the day when the climate idiots and the tax idiots organise a joint protest; the rolling road block can slow the cars to a halt, and then the Just Stop Oil/XR people can then sit down across the carriageway and refuse to move afterwards.
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The choice of The Haywain for a recent stunt is particularly ironic. In their apocalyptic version, the trees are all dying. In truth, the amount of tree cover in that region has steadily increased over the past two centuries (as anybody who's actually been there will attest), broadly in line with increases in temperatures/CO2 levels. Trees - like most plants - thrive where it's warm and wet (hence 'tree lines').

The climate people flip flop on whether warmer temperatures mean more or less rain - but whichever it is, it is BAD. A dried out river bed is the last place you should build a new road, it will still flood occasionally. There's an old car dumped in the background - so what? That's just fly tipping and wrong anyway. And commercial planes would never be allowed to fly that close together on the same path. Deliciously wrong on so many levels...

What's sauce for the goose...

From the BBC:

The Association for Consultancy and Engineering (ACE), which represents companies involved in designing the UK's infrastructure, admitted some people were suspicious of road pricing.

However, in its report "Funding Roads for the Future" it said charges for road usage should be introduced which took into account:

- whether a driver's journey was on motorways or country lanes
- the time of day
- how much congestion was on the network
- drivers' financial circumstances - for example, whether they were students, pensioners or unemployed

ACE said relying on money raised through fuel duty, Vehicle Excise Duty and the HGV levy was outdated. "The growing uptake of zero-emission vehicles means revenue from Vehicle Excise Duty and Fuel Duty will continue to decline as a percentage of the UK's GDP in the future," it said.

That's the beauty of fuel duty, it acts like a rough and ready road pricing (which is a good thing, in principle, it's rent for road space). If you drive during the rush hour, you cause more inconvenience, use more fuel for a given distance and pay more per mile. Lorries cause more wear and tear, accidents and pollution, but use a lot more fuel and pay a lot more per mile. Whizz round in a small car at the weekend, you're not getting in anybody's way, using less fuel and paying less per mile. It all sorts itself out nicely.

Fuel "costs" average 15p/mile, two-thirds of that is VAT and fuel duty, so petrol/diesel drivers are already paying 10p/mile road-user charge. The actual fuel cost is more like 5p/mile.

Cost of electricity/mile, at residential tariff is in the region of 2p - 4p/mile, i.e. not a huge difference in absolute terms. The real saving is not because electricity is "cheaper" than petrol or diesel, but because the former is lightly taxed (5% VAT) and the latter is heavily taxed. Depending on how the electricity is generated, the amount of C02 emitted (to the extent that we worry about this) is pretty much the same either way.

So by all means, level the playing field by having road pricing of 10p per mile, or whatever, but as a quid pro quo, ditch VAT and duties on fuel completely. This is the problem with electric and hybrid cars and all that nonsense - the end result is we will need road user charges to reduce congestion.

The notion of having means-tested road user charges should be consigned to the dustbin of shit ideas, obviously.
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From City AM (comment appeared as reader's letter today):

Why should we pay the EU for access to the EU market on services, financial or otherwise, if they will not be paying us for access to our domestic market on goods?

Let's be consistent about this, if the EU really believes in payment of fees for market access then they could start with an offer of the fees they are prepared to pay us for access to our wine market, our car market etc etc. Then we could add up all the market access fees payable in each direction, and given that they enjoy a chronic massive trade surplus with us they could pay us the net annual fee.

Or, if they prefer, let's go back to tariffs and they can pay us through that mechanism.

Denis Cooper

Economic Myths: "North Sea Oil faces wipeout as prices keep on plunging"

From The Sunday Times:

The primary culprit for this collective collapse is the oil price. Brent crude has plunged from $115 in the summer of 2014 to $33 (£23) a barrel last week...

And so on.

Extraction costs in the North Sea are about $40 (£28) a barrel, so that looks like a loss making position, does it not (until and unless the oil price rises again, as well it might)?

Actually, it all depends on how stupid the UK government is.

The pump price of a litre of petrol is currently about £1. Ten pence of that is refining, transport and retail costs; the cost/value of the petrol/diesel is about 19p*. The other 81p is fuel duty/VAT collected by the UK government.

For North Sea producers to remain viable, they have to be paid at least £28 a barrel, call it £30 to give them a bit of leeway. If the fuel duty/VAT on petrol/diesel from the UK part of the North Sea were reduced by 16p from 81p to 65p, then the petrol/diesel could still be sold for £1/litre** and would thus be competitive with slightly cheaper foreign-sourced fuel.

This 16p a litre notional shortfall is halved once you take other tax receipts from oil companies and their employees into account (about one-third of the 25p a litre they receive = 8p?). Whether this 8p shortfall is worth taking on the chin depends on...
- how important the oil industry is generally.
- the general health of the Aberdeen economy in particular.
- savings in welfare payments.
- whether you want to reduce UK trade deficit (each barrel not imported reduces out trade deficit by 19p).
- the importance of retaining oil-sector skills for invisible exports.

Whether it is or not I do not know (but I strongly suspect it is).

If the government decides it doesn't want a shortfall at all, assuming that about half of UK fuel is from the North Sea, they could up the above fuel duty/VAT rates by 4p each and we're all sorted.

* One barrel = 159 litres costs £23. Three-quarters of that can be turned into petrol or diesel and the rest is other stuff. £23 divided by 120 litres = 19p.

* £30 divided by 120 litres = 25p, plus 10p refining, plus 65p fuel duty/VAT.

Hey! I thought it was Labour's turn this week to come up with crackpot policy proposals!!

Spotted by Bob E in The Telegraph:

Buyers of gas-guzzling sportscars and other large-engine vehicles would face a new purchase tax (1) of up to £23,000 under plans drawn up by a government adviser and backed by a Cabinet minister.

Even the price of some small cars would rise by more than £1,500 in exchange for the abolition of annual Vehicle Excise Duty payments. However, buyers of new small efficient cars would get a government subsidy of up to £750 (2), under the proposed rules, which are being promoted by the Liberal Democrats. The proposals for vehicle taxation come as the Treasury considers the best way to reform or replace VED to respond to the increasing fuel efficiency of modern cars (3).

The plan is put forward today in a think-tank paper written by Tim Leunig, who has recently been appointed a special adviser to the Government. Mr Leunig’s paper for the Centre Forum think-tank – written before his appointment -- has been backed by Ed Davey, the Energy Secretary...

Mr Leunig said: "More efficient cars save motorists money and reduce global warming. What's not to like?"(4)

1) We already have a "purchase tax" on new cars, it's called "VAT". And a very bad tax it is too.

2) Brilliant. A "purchase tax" and a subsidy, all in one go, maybe we could just net off the two to a smaller tax amount?

3) We already have a splendid tax on the amount of fuel you use/amount of road space you use (two birds, one stone), it's called Fuel Duty.

4) Coming up with shit ideas and then using one of my favourite sign-offs, which I in turn adopted from The Remittance Man.

She was told about the fuel duty freeze as soon as school was over

Behind enemy lines

From the BBC:

Families with children will be hardest hit by tax and benefit changes aimed at cutting the deficit, a charity (1) argues.

The Family and Parenting Institute (FPI) says the average income of households with children will drop by 4.2% between 2010-11 and 2015-16, the equivalent of £1,250 a year. Average household income however will fall 0.9%, or £215 a year, say the FPI... The figures, calculated for the FPI by the Institute for Fiscal Studies (IFS) (2), suggests much of the fall in income during these years will be due to tax and benefit changes, as well as other reasons such as falling incomes.

"This research confirms that families with children are shouldering a disproportionate burden," said Katherine Rake (3) of the FPI...

In reply the government pointed to policies that it says are already relieving the burden for families. "The prime minister acknowledged that families are facing difficult times so the government has taken practical steps to help them - cutting fuel duty, freezing council tax and cutting income tax for millions," said the government in a statement. (4)

1) Might that be a fakecharity? Why yes! I gave their accounts a closer look two years ago. But weren't Blulabour going to get rid of all the fakecharities which Nulabour set up? You might think so, as this lot appear to be a thorn in the government's side, but as I said two years ago:

We all knew that Labour would do a scorched earth policy before handing over the keys to the Tories, but they've pre-financed this particular bunch to continue the fight from behind enemy lines: of all that lovely taxpayers' money rolling in, they've tucked away £7,480,898 at the bank (balance sheet, page 15 of the accounts) to keep them going for a couple of years after Blulabour has taken over.

Their taxpayer-funded income in the years straddling the change of government, i.e. to 31 March 2010 and 31 March 2011 (see page 14 2011 accounts) was £8.5 million a year, half what it had been under Nulabour, but they still had £5.8 million cash as at 31 March 2011 to keep them going for a couple of years.

2) The IFS are pretty straight, I think we can take their figures at face value.

3) Who is "raking" it in, no doubt.

4) Totally irrelevant statement: those changes or freezes were incorporated in the figures anyway; and those changes or freezes apply to all households, not just 'families with children' (what the FPI actually mean is 'families with children on benefits').

Note also that the government is obsessed with freezing the least-bad taxes fuel duty and council tax, and claims to be reducing income tax while having massively increased stealth taxes on income such as VAT and National Insurance, which are far worse.