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Petrol pump politics?

Nick Robinson | 13:29 UK time, Wednesday, 23 March 2011

A cut in petrol duty from tonight, the cancellation of all planned increases above inflation and a new "fair fuel stabiliser" - all paid for by the oil companies.

Petrol pump

The result? Fuel duty goes down by 1p a litre now instead of going up, as planned, by between 4-5p. The next time duty will rise in line with inflation is in January 2012.

We were told that that George Osborne would be inspired by Nigel Lawson's tax reforming and Michael Heseltine's activism. His headline grabber looks to have been inspired though by his great political enemy - Gordon Brown.

In 1997 Chancellor Brown raised £5bn in a windfall tax on privatised utilities. The way Chancellor Osborne is paying for a cut in fuel duty is by taxing the oil companies by £2bn a year. He is proposing not a one off windfall tax but a permanent mechanism which taxes the profits of the oil companies when the world oil price goes above a certain level. They would get a tax refund, however, if the price goes below it.

Cutting the cost of fuel was the chancellor's way to ease the squeeze on people.

His corporation tax cut, promise of tax simplification, planning reform and deregulation and the creation of enterprise zones were his recipe for private sector growth.

Update 14:46: Ed Miliband had nothing to say about the chancellor's proposal to tax oil companies more to keep the fuel duty down - surprising given that high fuel prices have been a theme he has pursued.

He was clearly wrong-footed by George Osborne's last-gasp fuel tax surprise but did squeeze in the briefest of mentions by contrasting today's cut with the rise in VAT announced in January:

"The chancellor cut duty by 1p but whacked up VAT on fuel by 3p - families won't be fooled, it's Del Boy economics".

However, the Labour leader's key focus was to ridicule a so-called "Budget for Growth" that downgraded the immediate growth forecast. That drop in growth and the other bigger pressures on incomes - not a penny or two less of an increase in fuel prices - will, he believes, shape the economics and the politics of the next year.

Comments

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  • Comment number 1.

    All in all not that bad really

    Not too much given or taken, the oil companies paying for the fuel duty cut (nice) which I do like as they all seem to post bigger than ever profits after fuel goes up 'due to the price of oil' and they never profiteer from that do they?

    If he really does simplify the tax system into 1 easy tax then I will think of him as a reformer (in a good way)

    Proof of the pudding though.......

  • Comment number 2.

    "A cut in petrol duty from tonight, the cancellation of all planned increases above inflation and a new "fair fuel stabiliser" - all paid for by the oil companies.

    The result? Fuel duty goes down by 1p a litre now instead of going up, as planned, by 4p. The next time duty will rise in line with inflation is in January 2012."

    A tax on big business to help the long suffering ordinary tax-payer.

    Now, why did Labour never think of that?

  • Comment number 3.

    We shall see, eh Nicholas?

    Cue the usual suspects......>>>>>

  • Comment number 4.

    Hmm, another blog that overlooks the fact that duty from fuel has increased in line with fuel price increases, and that a 1p reduction won't be much compensation from those struggling with these increases.

  • Comment number 5.

    The oil and gas companies will benefit hugely from the reduction in nuclear energy production that will be globally demanded as a result of the Fukushima disaster. They'll be able to absorb this extra windfall tax with no problem.



  • Comment number 6.

    Good approach to amalgamate both ni and income tax. I have always wondered why people say our basic rate is 20%. It is NOT 20% it is 32% and a movement towards just the one tax makes our tax more transparent.

  • Comment number 7.

    And watch the oil companies put up fuel prices by much more than 1p a litre!

  • Comment number 8.

    at least Gordon,Darling,Postie or Balls have had the last 2 bugets and hopefully none for a very very long time too. its going to take a long time to put the damage right, its a start but a long road to come

  • Comment number 9.

    1p off. That won't make any real difference! He put up VAT, thanks a lot for nothing!

  • Comment number 10.

    I know its long but this report from the USA goes to show that we no longer need to worry about fuel prices etc if only the USA would act on what it has in the ground.
    About 6 months ago, the writer was watching a news program on oil and one of the Forbes Bros. was the guest. The host said to Forbes, "I am going to ask you a direct question and I would like a direct answer; how much oil does the U.S. have in the ground?" Forbes did not miss a beat, he said, "more than all the Middle East put together." Please read below.

    The U. S. Geological Service issued a report in April 2008 that only scientists and oil men knew was coming, but man was it big. It was a revised report (hadn't been updated since 1995) on how much oil was in this area of the western 2/3 of North Dakota, western South Dakota, and extreme eastern Montana ..... check THIS out:

    The Bakken is the largest domestic oil discovery since Alaska 's Prudhoe Bay , and has the potential to eliminate all American dependence on foreign oil. The Energy Information Administration (EIA) estimates it at 503 billion barrels. Even if just 10% of the oil is recoverable... at $107 a barrel, we're looking at a resource base worth more than $5...3 trillion.

    "When I first briefed legislators on this, you could practically see their jaws hit the floor. They had no idea.." says Terry Johnson, the Montana Legislature's financial analyst.

    "This sizable find is now the highest-producing onshore oil field found in the past 56 years," reports The Pittsburgh Post Gazette. It's a formation known as the Williston Basin , but is more commonly referred to as the 'Bakken.' It stretches from Northern Montana , through North Dakota and into Canada ... For years, U. S. oil exploration has been considered a dead end. Even the 'Big Oil' companies gave up searching for major oil wells decades ago. However, a recent technological breakthrough has opened up the Bakken's massive reserves..... and we now have access of up to 500 billion barrels. And because this is light, sweet oil, those billions of barrels will cost Americans just $16 PER BARREL!

    That's enough crude to fully fuel the American economy for 2041 years straight. And if THAT didn't throw you on the floor, then this next one should - because it's from 2006!

    U.. S. Oil Discovery- Largest Reserve in the World

    Stansberry Report Online - 4/20/2006

    Hidden 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world. It is more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction. In three and a half years of high oil prices none has been extracted. With this motherload of oil why are we still fighting over off-shore drilling?

    They reported this stunning news: We have more oil inside our borders, than all the other proven reserves on earth.. Here are the official estimates:

    - 8-times as much oil as Saudi Arabia
    - 18-times as much oil as Iraq
    - 21-times as much oil as Kuwait
    - 22-times as much oil as Iran
    - 500-times as much oil as Yemen

    - and it's all right here in the Western United States .

    HOW can this BE? HOW can we NOT BE extracting this? Because the environmentalists and others have blocked all efforts to help America become independent of foreign oil! Again, we are letting a small group of people dictate our lives and our economy.....WHY?

    James Bartis, lead researcher with the study says we've got more oil in this very compact area than the entire Middle East -more than 2 TRILLION barrels untapped. That's more than all the proven oil reserves of crude oil in the world today, reports The Denver Post.
    Don't think 'OPEC' will drop its price - even with this find? Think again! It's all about the competitive marketplace, - it has to. Think OPEC just might be funding the environmentalists?

    http://www.usgs.gov/newsroom/article.asp?ID=1911

  • Comment number 11.

    sorting the NI /Tax situation is going to be an utter nightmare.

    Hopefully it while hit hard those highly "contract staff" at media companies.

  • Comment number 12.

    1p a litre is not going to get the motorist dancing in the streets!!!! Taxing the oil companies to pay for it?? nah they will pass the cost on the the motorist by charging more for the petrol they sell. So again false economy.

  • Comment number 13.

    5#

    Globally demanded by who???

  • Comment number 14.

    it is a step in the right direction and any decrease in fuel is always welcome....i have six children and drive a 2.4l 8 seater as it is cheaper to take the children out in the car than public transport. it's now getting to the point were i have to consider getting rid of the car as my car insurance has gone up by £200 even though i have 4 years no claims and road tax is going up....so a 1p drop in fuel is not going to make a difference to my circumstances.....nice to see a government listen for a change.....suppose little steps in the right direction is better than none

  • Comment number 15.

    I thought this was supposed to be a "green" budget? How does making it cheaper to driver contribute to green aims?

    Of course I have enormous sympathy with people and companies whose livelihoods rely on fuel, in particular delivery firms, taxi drivers and bus companies - but surely there must be some mechanism whereby these people could be charged at a lower rate, whilst private individuals, many of whom drive unnecessarily, continue to pay at the higher rate. If we really want to progress towards a low-carbon economy, we need to get people out of their cars. Making driving cheaper isn't the way to do that.

  • Comment number 16.

    At some point in the dim-and-distant past, the people lost interest in 'the Budget'.

    I can remember Dad and his mates moaning and groaning when the Chancellor of the day squeezed them until their pips squeaked as their Woodbines and warm beer got hammered yet again.

    Today, not a single person in this office of about fifty reasonably intelligent people has even mentioned it.

    Somewhere along the way, these politicians totally lost touch with the people they are meant to serve.

  • Comment number 17.

    Take loads in petrol tax and give a little bit back and claim political plaudits for it. All sounds familiar. Another damp squib from Osborne http://bit.ly/hPGKu7

  • Comment number 18.

    Positives:
    Proposal to simplify tax - At last!
    Fuel duty
    Personal tax allowance
    Home buyers help

    Negatives:
    Not as much help on fuel as Id like
    Indication of helping the rich is angering - saying about it leads to tax avoidance - well what about the significant amount of poorer people HAVING to avoid it to pay for food!!!!! This makes me angry! As someone earning in the low £20ks, having to rent, having to commute because I cant afford to live closer to my work, having to deal with VAT increases
    Lower tax on business. I don't seriously believe this will make the people I work for do anything other than pocket more profit, in fact my boss already said that! Why not tax people less. So some good some bad. On fuel I am very pleased to see some action rather than just a simple freeze.If it wasn't for the 50p tax being in consideration Id actually be very pleased with this budget. If ALL income tax levels were in consideration then I would understand more.

  • Comment number 19.

    All this user's posts have been removed.Why?

  • Comment number 20.

    Politically a very astute and competent budget. Nothing too controversial and a small piece of banner top headline news to feed the mass media.

    A series of potentially useful incentives to industry and piece of theatre on the banking levy to offset (well in his dreams perhaps) the extra corporation tax reduction.

    I think it will take some time for people to get used to the idea that this Government will be different to previous ones and it is not about identifying and building new industries by decree or design - but by pursuing the "Field of Dreams"approach, build it and they will come.

    This is a slow burn strategy and will very much I hope see some improvement.
    Having quoted Dyson in his speach one hopes that perhaps Mr Osborne also secured an agreement from Mr Dyson to return his manufacturing back to the UK as a result of these changes? Thus proving the worth.

  • Comment number 21.

    As with all governments, George Osborne hath given and also hath taken away. The duty on a litre of fuel has been capped and will be reduced by 1p tonight. However I note in the small print that he also intends to raise vehicle tax disc fees by CPI rises in the near future. A cheap tax dic at £125pa, at the moment, will attract an increase of around £6.25 to a total of £131.25 a year. This works out at an extra cost of 1p on the first 625 litres you buy in each year. I don't buy anywhere near 12 litres a week so I'm losing any benefit that the 1p price drop announced would provide. So much for a price decrease!

  • Comment number 22.

    This is not a 1p cut but a 2 p rise. I think no amount of glossing can get over this!!

  • Comment number 23.

    This is.......news???


  • Comment number 24.

    I don't understand Nick?

    You say:

    "He was clearly wrong-footed by George Osborne's last-gasp fuel tax surprise but did squeeze in the briefest of mentions by contrasting today's cut with the rise in VAT announced in January:"

    and then you say Red Ed said:

    "The chancellor cut duty by 1p but whacked up VAT on fuel by 3p - families won't be fooled, it's Del Boy economics".

    How has he been wrong footed? He got it spot on! He demisted the smoke screen!

    And the line:

    "Norman Lamont with an i-pod!" was hilarious :)

  • Comment number 25.

    "8. At 14:41pm on 23rd Mar 2011, IR35_SURVIVOR wrote:
    at least Gordon,Darling,Postie or Balls have had the last 2 bugets and hopefully none for a very very long time too. its going to take a long time to put the damage right, its a start but a long road to come"


    Last time I looked Osborne was downgrading growth? So how is he reversing anything? Sounds like he is causing serious damage.

  • Comment number 26.

    "15. At 14:50pm on 23rd Mar 2011, Jonathan Haw wrote:
    I thought this was supposed to be a "green" budget? How does making it cheaper to driver contribute to green aims"

    A good point. Maybe if they ringfenced extra fuel revenue for developing Green Technology it may help, but alas like everything the Con-dems do, it is short termist.

  • Comment number 27.

    I'm surprised Osborne didn't reverse Labours decision to extend the age of those being able to access a lump sum from their company pension pot from 55 back to 50. Many 50 year olds would like to access those funds now and that would boost spending in the economy.

  • Comment number 28.

    @#15

    I assume you don't live in the countryside where buses are few and far between, let alone expensive.

    I am all for a green economy and budget, but we can't all stop using cars overnight with no viable alternative in place. Buses need to be frequent and relatively inexpensive not to mention actually take you from the countryside to the main industrial areas of town. It's no good needing 2 or 3 buses (each with an individual high fare) and a long walk to get to work because the bus only goes to the town centre.

  • Comment number 29.

    Is it so astonishing that in this climate the Alliance are finding ways of reducing tax rates.....?
    Will they form a protective barrier against the flood of increases in the actual price of fuel and food commodities..........?
    On both counts no...tax revenues are increasing in proportion with price rises in the double digit region. Couple that with the potential for interest rate rises and we are looking at a potential financial Tsunami.
    The Alliance will be praying that the perfect financial storm does not happen and so should we all....

  • Comment number 30.

    #10 very interesting article is the US playing the long game wait for the Middle East oil to start running out first ?

  • Comment number 31.

    There are a lot of people complaining about the VAT on Petrol/Diesel; but I think that everyone has forgotten that the 2.5% VAT rise introduced last year is the mechanism to recoup the 2.5% reduction introduced by Mr. Darling in 2008!! Tax receipts are down and we are still borrowing nearly a 150 billion this year; please remember that it will be a long road to recovery; not just a few short years. I for one am grateful that there is an increase in the Mileage Allowance and also a reduction in the Fuel Duty; it has been long overdue for those who use their cars for business use; for the past three years costs here have increased dramatically but the renumeration has actually fallen.

  • Comment number 32.

    #15 Johnathon

    The simple fact is if you don't live in London or Manchester then traveling by public transport is not a viable option

    In the UK (I live in Holland at the moment) it costs me just over five pounds for a return journey of 8 miles - and the bus runs once an hour

    The answer is not to tax people out of their cars - this was Labour's approach; just make it more and more expensive without any other choice

    The answer is to make public transport clean, reliable and regular. Then folk will stop driving, until then they will keep using cars

    Not everyone lives near a town or city - public transport is not up to the job

  • Comment number 33.

    #21 those moaning about giving and taking should go and see Flash Gordon and ask for some of his £65K he gets for doing nothing. There is the route of all the issues

  • Comment number 34.

    Another thing about the VAT on petrol; Mr. Milliband has quoted that this government has added 3p VAT; but how can it? the Fuel Duty proportion of what we pay (about 60p) is not liable for VAT, so in actual fact the VAT increase is only 1p!!

    Liked the fact that James Dyson was mentioned in the Speech; perhaps we should use one of his vaccum cleaners to clean up the mess?...

  • Comment number 35.

    The economy is fuelled by the general population buying items for their homes..yet the housing market is stagnated because it costs too much to move house...ie STAMP DUTY stops people moving, and spending money on their new homes...hence the economy slows down.....WHY therefore no incentive for the middle housing market by a reduction in stamp duty, or at least an experimental 1 year exemption from stamp duty to see that people will move and then spend money...that brings in other taxes, therafter. This will create the MARKET FOR GROWTH...which is what is the aim....surely ?

    The middle housing sector..are the ones with EQUITY that can be released to spend on not only the new home, but other items..eg Cars...Holidays

  • Comment number 36.

    The fuel duty cut is being paid for by additional tax on oil companies. Despite oil companies' beyond-reproach reputations as society-minded philanthropists, I can't help but think it will just get passed on to the consumer somehow. Of course, the oil companies will need to factor in the extra costs of administration too...

  • Comment number 37.

    #6 for pensioners its 20% not 32% as they pay no NI, so this is going to be a real mess to sort out, unless pensioners get a massive tax allowance to compensate them. This will be frought with problems trying to undo Gordon spagetti of a tax system

  • Comment number 38.

    The fuel price change is relatively pointless: 1p off the price when it constantly goes up by many pence at a time due to external factors.
    More important to a large section of the public is the proposed flat rate pension increase and the intention not to include existing pensioners; so one person will get it but a neighbour born one day earlier will not. This is divisive and does not make sense; if the increase is necessary then it is necessary for everyone. We will have for many years a society of HIRAPS (Higher Rate Pensioners) and LORAPS (Lower Rate Pensioners) I am 60 and may be one of those who will not get the higher pension (we can be sure the government will promise this but will take a long time to actually implement it) and I will vote against this government in the next election. I urge all LORAPs to do the same, especially in marginal constituencies.

  • Comment number 39.

    I feel secure listening to George Osborne and have faith in this government, something which I did not with the previous one. The previous one caused all the problems by importing people like there was no tomorrow so we have the equivalent of another country living in ours. This is what caused all the trouble, the shortage of housing, the strain on the NHS (go and look at Northwick Park Hospital in Brent, real eye opener), the strain in our schools some in areas where hardly any English is spoken, the millions more cars on the roads, the millions of foreign people tramping around our towns and cities (why aren't they working and contributing to the economy) and the thousands of students ostensibly here to study whilst sending money back to their own countries. Hmm. Anybody who disputes this is either a foreigner themselves, mixed race or living in an area which is still predominantly English.

    Yes, the budget is a good and fair one done by a party who loves this country and not an unpatriotic one like Labour which doesn't.

    George is Great. I am happy.

  • Comment number 40.

    "31. At 15:24pm on 23rd Mar 2011, Tony C-Bradford wrote:
    There are a lot of people complaining about the VAT on Petrol/Diesel; but I think that everyone has forgotten that the 2.5% VAT rise introduced last year is the mechanism to recoup the 2.5% reduction introduced by Mr. Darling in 2008!!"


    Err No it's not!!

    That is not how it works!

    Doh!! Economics for beginers I think!

  • Comment number 41.

    "34. At 15:31pm on 23rd Mar 2011, Tony C-Bradford wrote:
    Another thing about the VAT on petrol; Mr. Milliband has quoted that this government has added 3p VAT; but how can it? the Fuel Duty proportion of what we pay (about 60p) is not liable for VAT, so in actual fact the VAT increase is only 1p!!"

    Wrong again.

    We are paying 2p extra overall.

    Doh!

  • Comment number 42.

    "21. At 15:02pm on 23rd Mar 2011, fastbowler wrote:
    As with all governments, George Osborne hath given and also hath taken away. The duty on a litre of fuel has been capped and will be reduced by 1p tonight. However I note in the small print that he also intends to raise vehicle tax disc fees by CPI rises in the near future. A cheap tax dic at £125pa, at the moment, will attract an increase of around £6.25 to a total of £131.25 a year. This works out at an extra cost of 1p on the first 625 litres you buy in each year. I don't buy anywhere near 12 litres a week so I'm losing any benefit that the 1p price drop announced would provide. So much for a price decrease!"

    Precisley!

    Guess some people don't get it.

    The budget is just a big con, with give aways to Tory Party chums in Corporation Tax cuts!

  • Comment number 43.

    Ed Miliband's performance in the house was embarrassing and added nothing to the debate. Personal attacks on the Chancellor and Deputy Prime Minister are very easy - some might say cheap - but seemed to be a smoke screen for lack of imagination or alternative solutions. Having just seen Nick Robinson, Stephanie Flanders and Robert Peston interviewing Ed Balls, it is patently clear that Labour would have been forced to take very similar action to remedy the chaos left behind after their term in office. In opposition, you can say anything - in government, you have to act.

  • Comment number 44.

    How can Ed Milliband criticise the fuel duty issue on the grounds of VAT? When Labour reduced VAT from 17.5% to 15% they increased fuel duty permanently to prevent a price reduction so that when the VAT rate was reinstated at 17.5% the duty was not reduced.

  • Comment number 45.

    @ 20

    Dyson was already doing this last April. So this is a bit of a smoke screen.

    http://www.guardian.co.uk/business/2010/apr/26/dyson-recruit-350-engineers

  • Comment number 46.

    At 14:37pm on 23rd Mar 2011, juliet50 wrote:
    Good approach to amalgamate both ni and income tax. I have always wondered why people say our basic rate is 20%. It is NOT 20% it is 32% and a movement towards just the one tax makes our tax more transparent.
    ------------------------------------------------------------------------------------
    A move in the right direction perhaps - we need to see the detail. Why do you quote figures that overestimate the tax burden? Surely that's counterproductive if you would welcome such a change? The typical/average percentage of gross earnings paid in income tax is estimated at 12.6% (thanks for the link to those tables AndyC555). So a more illustrative and less scary number for IC + NI liabilities would be 24 - 25%.

  • Comment number 47.

    "33. At 15:29pm on 23rd Mar 2011, IR35_SURVIVOR wrote:
    #21 those moaning about giving and taking should go and see Flash Gordon and ask for some of his £65K he gets for doing nothing. There is the route of all the issues"

    Can you explain, why we had a strong period of growth and recovery under Flash Gordon budget last year which Osborne has reversed?

  • Comment number 48.

    1p per litre = 4.5p per gallon, that's hardly going to make any difference to my weekly fuel costs. I will save 4.5p per weeks, yipee! After several months I'll save so much I'll be able to buy a chocolate bar at the vending machine. You can save 1p per litre by finding a cheaper petrol station anyway.

  • Comment number 49.

    "36. At 15:32pm on 23rd Mar 2011, Andrew Oakley wrote:
    The fuel duty cut is being paid for by additional tax on oil companies. Despite oil companies' beyond-reproach reputations as society-minded philanthropists, I can't help but think it will just get passed on to the consumer somehow. Of course, the oil companies will need to factor in the extra costs of administration too..."


    That was my thought exactly. Oil companies will no doubt pass it on to the consumer somehow and we will end up paying for it.

  • Comment number 50.

    15. At 14:50pm on 23rd Mar 2011, Jonathan Haw wrote:
    I thought this was supposed to be a "green" budget? How does making it cheaper to driver contribute to green aims?

    Of course I have enormous sympathy with people and companies whose livelihoods rely on fuel, in particular delivery firms, taxi drivers and bus companies - but surely there must be some mechanism whereby these people could be charged at a lower rate, whilst private individuals, many of whom drive unnecessarily, continue to pay at the higher rate. If we really want to progress towards a low-carbon economy, we need to get people out of their cars. Making driving cheaper isn't the way to do that.

    ---------------------------------------

    Sure, i'll give up my car ...... The second, outside of the home counties, we see more than a rickety old bus turn up twice a day and take 2 hours to go 7 miles. How about reacting to emergencies? Walk 10 miles to elderly relatives house? oh hold on, get a taxi! Nope, £20 for that journey as well and just as damaging to the environment as if i'd driven my given up car.

    How Greenists can, on onehand, have such good ideas and spearhead them for greener replacements of existing issues, yet be so completely and utterly unrealistic of the practicalies behind their implimentation is quite beyond me.

  • Comment number 51.

    i have the perfect solution to britains debts.......debt consolidation...we be clear is 5 years....i will e-mail osbourne the number!!!!!....can't be any worse than any other suggestions....seriously though cars are a must in todays world....if they make it too expensive no-one will be able to afford to go to work

  • Comment number 52.

    TBB, you've been nominated as Rebutter and Tub-Thumper in chief today then?

  • Comment number 53.

    Did you know that ToryPressHQ on Twitter went with your little faux pas about Ed not mentioning fuel lol oops

  • Comment number 54.

    In March 2010 I was paying less than £1.20 a litre for petrol. Now I'm struggling to find anywhere that sells petrol at less than £1.37. With the rise in oil prices and VAT I am actually paying nearly 6p per litre more Fuel Duty than I was a year ago.

    Don't let the Chancellor fool you in to thinking he's giving you a break. Reality is he's already quietly taken tens of millions of pounds from us in additional Duty over the past year and if the oil prices continue to rise at the same rate he will be another 3p per litre richer in 12 months time. 1p off is a token gesture that frankly I find rather insulting.

  • Comment number 55.

    #32. I once tried to take a train for a business trip from the south west to Norwich, thinking that I could use at least some of the travel time (10 hours and 2 changes) for work. I arranged the meeting time and duly arrived at the station - only to be told that the train for the first leg of the journey was cancelled. Straight back into the car and drove to Norwich - arriving about one hour before the rain would have got me there.

    Travelling from one city to another is fine, including any points on the main line routes. Try getting to a destination off the main routes and it becomes very difficult, not really suitable for 'business hours' and expensive. On current costs, the train would cost over £200 against a fuel cost of around £75.

  • Comment number 56.

    "39. At 15:38pm on 23rd Mar 2011, Flame wrote:
    I feel secure listening to George Osborne and have faith in this government, something which I did not with the previous one. The previous one caused all the problems by importing people like there was no tomorrow so we have the equivalent of another country living in ours.

    George is Great. I am happy."

    *Gets Sick Bag!*

    You don't happen to work for the Tory Party by any chance? :P

  • Comment number 57.

    "52. At 15:55pm on 23rd Mar 2011, Fubar_Saunders wrote:
    TBB, you've been nominated as Rebutter and Tub-Thumper in chief today then?"

    As Elvis would say "Saankyooo Virry Maaaachhh"! :)

  • Comment number 58.

    46 "The typical/average percentage of gross earnings paid in income tax is estimated at 12.6% (thanks for the link to those tables AndyC555)."

    You're welcome to the link. Do be careful how you interpret the figures though. Wouldn't want you to make any silly statements about 22% of income being the worst a "40%" taxpayer can expect to pay in income tax.

  • Comment number 59.

    glosterman @ 43

    "Ed Miliband's performance in the house was embarrassing and added nothing to the debate."

    What a very strange and exotic comment! Miliband was more than competent. Fish out your 'Opposition Leader replies in the House of Commons to Chancellor's Budget' compilation tape (yes, that one ... it's in the bottom drawer underneath that other stuff) and you will see how right I am.

  • Comment number 60.

    43. At 15:45pm on 23rd Mar 2011, Glosterman wrote:
    Ed Miliband's performance in the house was embarrassing and added nothing to the debate.
    ==================================

    I have always thought that the Shadow PM is on a hiding to nothing when replying to the Chancellor of Exchequer's specch. At most he will have seen the speech 30 minutes beforehand which is not enough time to understand the basics let alone the finer detail.

    They should just get on with other business after the Budget speech and allow a day before Shadow PM and Chancellor of the Exchequer to give sensible replies. I know its tradition, but traditions can also change. Besides its the fine print that counts and usually things will be clearer in a few days. Today is all verbal jousting with little factual content.

  • Comment number 61.

    "44. At 15:47pm on 23rd Mar 2011, derek54 wrote:
    How can Ed Milliband criticise the fuel duty issue on the grounds of VAT? When Labour reduced VAT from 17.5% to 15% they increased fuel duty permanently to prevent a price reduction so that when the VAT rate was reinstated at 17.5% the duty was not reduced."


    I think this was done to stimulate the economy. A policy that worked.

  • Comment number 62.

    #10 Mick Speller:

    What a totally absorbing article! More of the same please Mick. Well done indeed.

  • Comment number 63.

    I don't understand Mick Spellers comment. He says that there are over 500 Billiion barrels of oil in the North Dakota region. However, the USGS website that he provides a link to says 3 to 4.3 billion? Moreoevr, this oil has yet to be extarcted, how will this impact the current budget?

  • Comment number 64.

    "Anybody who disputes this is either a foreigner themselves, mixed race or living in an area which is still predominantly English. - Flame @ 39

    Like Midsomer. Hey it's on tonight! - new series (a younger Barnaby and stuff) but still no ethnics, Flame, so you'll be able to settle down for a couple of hours and enjoy.

  • Comment number 65.

    So this is osbourne's best effort in terms of a 'budget to fuel growth' ?

    Yet he is forced to admit that growth will be DOWN to 1.7%

    That's 1.7% for the whole year, compared with 1.8% for just the second quarter last year.


    Tories: taking labour's mess and making it worse.

  • Comment number 66.

    10. Mick Speller

    Mick, this is spam, a chain email that's been doing the rounds for ages.
    And if you bother to check the USGS estimates for the Bakken reserves they don't come anywhere near the figures quoted in the email. The EIA also does not recognise the claims.

    But if you're convinced, add these claims to the world's 'proven' oil reserves of ±1.33 trillion barrels. And it's logical that world reserves are likely to increase as more are discovered. Comforting.

    Were it not for the fact that the crude oil we extract today took ±150 million years to create.

    And the world consumes ±85M barrels a day. (The US ±20M bpd)

    So unless we reduce consumption and the dependence on oil dramatically we're still looking at a problem. Nothing to do with environmentalists trying to 'dictate our lives'. Just facing up to plain facts.

  • Comment number 67.

    49. At 15:51pm on 23rd Mar 2011, ToriesBrokeBritain

    Agreed -

    Bertie Wooster gives us a bogus cut in fuel taxes - which is only giving us our own money back. Then he recoups that from oil companies who will pass it on to the consumer.

    Bertie ends up with the same tax, the oil companies keep making the same profit, we keep on paying through the nose.

    Basically a scam so bertie can attempt to wiggle out of responsibility on fuel prices.

  • Comment number 68.

    Good budget for high mileage drivers and truckers, which will encourage them to truck more miles and get us back to the record UK fuel consumption years of the mid 2000s. Not good for road congestion, air pollution and CO2 emissions though.

    I'd have liked a cut in the road tax instead - would help low mileage folk (OK, I own up, that's me) and as a flat rate cut would help the less well off proportionally more. £10 cut in road tax instead of 1p off fuel tax would have been good for those doing less than 1000 litres a year, and would not have destroyed the government's claim to be green.

  • Comment number 69.

    Where I am the prices at the pumps have gone up on average by about 3p a litre since 0830 this morning, so by the morning prices will only be 2p a litre more than this morning. Thanks George, whoopee doo! Out of interest is this happening across the country or just in some areas?

  • Comment number 70.

    There is something not quite right about funding a reduction in petrol duty by taxing oil companies. It's like trying to lift yourself up by pulling on your own shoelaces. Will the oil companies really accept a £2 billion expense without passing it on via higher fuel prices? Seems very unlikely.

  • Comment number 71.

    "Think OPEC just might be funding the environmentalists?" Ha ha ha ha ha... hee hee hee... ha ha !! I've read some paranoid drivel on this site in my time but this pretty much tops the lot. Well done!

  • Comment number 72.

    There always comes a tipping point in the world of taxation and history has shown that revenue for the government will eventually decrease the more they raise the tax. For instance I shall find more inventive ways to put biodiesel in my car, I shall work for cash and generally be more creative. I recently returned from Spain where diesel is about half the price there. How can that be fair? This budget has done nothing to decrease our tax burden and I for one will fight back through any means no matter how borderline.

  • Comment number 73.

    45. At 15:48pm on 23rd Mar 2011, ToriesBrokeBritain wrote:
    @ 20

    Dyson was already doing this last April. So this is a bit of a smoke screen.

    ===============

    Thats R&D , very much a good sort of job to encourage - but we need the manufacturing , this is what is exported and pays the bills, plus lets be politically incorrect here, some people are just not cut out to be rocket scientists and screwing bits of plastic together is probably the most they can really do.
    We need jobs these types of jobs also and manufacturing produces them - great his R&D remains as it always has, but the manufacturing , the bolting it together is what we require to soak up the unemployed.

  • Comment number 74.

    65 jon112dk

    So this is osbourne's best effort in terms of a 'budget to fuel growth' ?

    >>>>>>>>>>>>>>>>>>>>>>>>>>

    So why not enlighten us - what would you have done if you had been making the speech?

  • Comment number 75.

    On balance I think this was a decent effort to stimulate growth. We should all remember that we are bankrupt and trading insolvent thanks to 10 years of profligate Labour mismanagement.

    I thought Ed Milliband made a complete fool of himself in his response by turning it into a personal slagging off of the people not the policies. I guess in the end they have no more idea today how to manage the economy than they had when Nero was fiddling while rome burned (Sorry Gordon & Darling)

    Saddly the Labour party made a serious mistake when they picked the wrong brother and while I support the present lot, good government also needs a good opposition. Not a no ideas, no policies, no answers and no future bunch led by an idiot who have never even had the decency to own up to having been responsible for the problems we face today.

  • Comment number 76.

    Anyway, shouldn't we pushing petrol prices up not down? Discourage car use. Unpopular with the electorate in the short term perhaps but we should be thinking of our children (and our children's children).

  • Comment number 77.

    John Constable @ 16

    Just quickly getting back to you (prior thread) on fiscal hypothecation. I see the attractions of this – encouraging more honesty in our politicians, right? - but I’m not a fan. You’d have to start completely from scratch for one thing – since it’s gone so awry in the past – and it would be highly complicated if it’s going to be meaningful. You’d need to atomise each tax into this amount for the army, that amount for the justice system, this amount for road building etc etc. Really would get convoluted. Also you’d have the problem that the public tend to overvalue some things and undervalue others. Kind of a herd instinct. If, for example, we had a ‘doctors and nurses' tax (for picking up the cost of them) and a ‘traffic wardens' tax (for same), the first of these would be far more popular than the second. Not with me, I hasten to add, but with ordinary people. So then if we actually needed more wardens, the government would be faced with saying to the public, ‘we’d like to put up your traffic warden levy.’ Little chance of getting the nod. Conversely, every chance of getting the green light for a hike in ‘doctors and nurses’ tax – even if we already have sufficient. Two possibilities, therefore, as to what would happen: (a) they raise the D&N tax and feel they have to spend it on more Ds and Ns (even though it’s traffic wardens we desperately want) – upshot is oversupply of one and undersupply of the other, or (b) they raise the D&N tax but then fiddle it so as to divert the money to the parking problem – back to square one regarding our ‘honesty’ objective.

  • Comment number 78.

    61. At 16:25pm on 23rd Mar 2011, HammerSingh wrote:
    "44. At 15:47pm on 23rd Mar 2011, derek54 wrote:
    How can Ed Milliband criticise the fuel duty issue on the grounds of VAT? When Labour reduced VAT from 17.5% to 15% they increased fuel duty permanently to prevent a price reduction so that when the VAT rate was reinstated at 17.5% the duty was not reduced."


    I think this was done to stimulate the economy. A policy that worked.

    =======================

    Hammer, you really don't get the point do you.

    Or do you think raising fuel duty stimulates the economy?

  • Comment number 79.

    At 16:21pm on 23rd Mar 2011, AndyC555 wrote:
    46 "The typical/average percentage of gross earnings paid in income tax is estimated at 12.6% (thanks for the link to those tables AndyC555)."

    You're welcome to the link. Do be careful how you interpret the figures though. Wouldn't want you to make any silly statements about 22% of income being the worst a "40%" taxpayer can expect to pay in income tax.
    --------------------------------------------------------------------------------------
    So tell us Andy what is the estimated typical or average amount of tax paid by 40% taxpayer? Bet my mistaken answer (22% is the tax liability of someone on the 90th percentile - well within the 40% band) is less misleading than your 'rough and ready' theoretical maximum amount of 37%. But then you'd know with all your expertise on such matters that the tables you gave the link for give average figures so why not just point that out. Can you see now why some of us might 'distrust' your sometimes misleading rough and ready calculations.

  • Comment number 80.

    67. At 16:37pm on 23rd Mar 2011, jon112dk wrote:
    49. At 15:51pm on 23rd Mar 2011, ToriesBrokeBritain

    Agreed -

    Bertie Wooster gives us a bogus cut in fuel taxes - which is only giving us our own money back. Then he recoups that from oil companies who will pass it on to the consumer.

    Bertie ends up with the same tax, the oil companies keep making the same profit, we keep on paying through the nose.

    Basically a scam so bertie can attempt to wiggle out of responsibility on fuel prices.

    ==================

    He must have been taking lessons from Gordon I guess.

  • Comment number 81.

    so 1p off fuel duty and hence a 1p drop off a litre of petrol from midnight tonight ... but wait what's this - petrol prices at all my local stations have gone up 1.5 pence today since Yesterday- so tomorrow the petrol prices will "drop" to 0.5 pence dearer than they were yesterday
    But it's Oil companies I feel sorry for ...

  • Comment number 82.

    Come on guys, too much time spent looking at the little picture. 1p here and there on fuel duty, a 0.4% change in a growth forecast.

    How about EIS income tax relief increased to 30% and the amount you can invest going up by 400%!! Entrpreneurs relief going up to a lifetime allowance of £10,000,000.

    Honestly, if you think "nickels & dimes", that's all you'll ever have.

  • Comment number 83.

    74. At 16:57pm on 23rd Mar 2011, AS71 wrote:
    65 jon112dk

    So this is osbourne's best effort in terms of a 'budget to fuel growth' ?

    >>>>>>>>>>>>>>>>>>>>>>>>>>

    So why not enlighten us - what would you have done if you had been making the speech?"

    I've tried that approach with jon earlier.

    Won't work, jon's not what you'd call an 'ideas' man.

  • Comment number 84.

    "some people are just not cut out to be rocket scientists and screwing bits of plastic together is probably the most they can really do."

    I know that, Neil, and you know that but don't let Saga hear you say it. he believes everyone could be Einstein if only they didn't have a private school 5 miles down the road from where they were taught. Something like that, isn't it Saga?

    Talking of blustering windbags, anyone seek Lefty11? One minute he was demanding (no, "Demanding", no "DEMANDING") that I cost my hostels idea and then when I did and asked for his alternative ideas, he ran off and hid under a stone. Very odd.

  • Comment number 85.

    VAT @ 20% touches and affects everyone.

    If you have lost your job - you still pay VAT @ 20% on top of fuel duty to attend interviews and still pay VAT @ 5% on heat and light.

    The cost of basic foods for pensioners on fixed incomes is rising. Vat @ 5% on top of increasing gas/electric bills.

    Is it just me that sees something very divisive and unfair about Value Added Tax? You have to pay it on basics - whether you can afford it or not? Where does all that value added tax go?

    What's the point in changing tax allowances in mean and meager ways that don't even cover the increasing cost of the 5% VAT on horrendous energy bills.

    It's all so fake and disgusting to be treated like fools who have no choice but to struggle on and suppress our anger at being treated like idiots, by deceit.

  • Comment number 86.

    This is a recipe for a disaster, what if unforeseen circumstances such as economical meltdown happen in the US, China or Europe, what if the Euro collapse, what if there will be a war, what then will be our faith? double whammy disaster I think.

    Taxing oil companies will upset some of the biggest investment companies in the UK, Oil-ies investors are some of the ruthless people on this earth, I wonder how they will have their revenge, I think they feel that they are insulted by increasing taxes on their revenue as all the north sea oil exploration are high risk, investors will be looking somewhere else I think, maybe "Libya" I think, it seems it will be safer to invest in Libya then the UK north sea.

    Increasing VAT which resulted in higher living cost then giving back 1p which companies will give back to consumers is not an economy plan, it's shuffling money, any one can do that, but still they didn't do it right.

    Who thought this guys maths !? I think the LIBS-CONS will do our economy a favour if they buy some books in economy.

    It seems to me that they never had a plan before the election.

    One last thing thought don't send your kids to Eaton


  • Comment number 87.

    77 - "Not with me, I hasten to add, but with ordinary people."

    There we have it, potential voters. Saga wants you 'ordinary' people to vote for his ideas but you're not like him, he's different, better than you.

    Deary me no, he's not one of you lot.

  • Comment number 88.

    76 - "we should be thinking of our children (and our children's children)."


    I'm not sure children should be having children.

  • Comment number 89.

    56. How rude. And, no I do not work for the Tory party. You would be quite surprised if you really knew who I was.

  • Comment number 90.

    1p a litre.

    as rabie burns said be content wi, little.

  • Comment number 91.

    Another "Casino Badget".

    There is no reduction in Fuel Duties (see page 62 2.131 Budget Report). Its deferred and will increase by RPI + 3.02 p/litre in January 2012 and again in August 2012. Oh yes there are some weasel words about seeking views. Wonderful double tax take by Osborne; we pay and NOW the oil companies (sorry us pay again).

    Brown invented fiscal drag now Osborne has turned it into an art form. Just look at the creative use of RPI v. CPI throughout the report. Now we have "stagflation drag".

    I have however failed to find the abolishment of income tax once we had defeated Napoleon as promised by William Pitt. Perhaps I have to wait until the pre-Budget report in November?

    Fairness, simplification of the tax system more like another attempt to re-arrange the deck chairs on the "Titanic".

  • Comment number 92.

    Not saying that, Andy (87), that I'm 'better' than anybody else, it's just my antennae are tuned into channels which others don't always pick up. It's a time thing more than anything else. I have the time to really fiddle around with my dial.

  • Comment number 93.

    I think it is disgusting. He tries to "reduce the squeeze" by favouring those that can afford cars and who can afford to complain about it! All those car-drivers that complain about how unfair higher fuel prices are - get over it! You cause congestion, air pollution that damages everyone elses lungs - especially those that walk or cycle - are even dangerous to pedestrians and cyclists, and take up huge areas for parking! And it is car owners and drivers that contribute to the obesity problem and climate change (http://www.nationalschool.gov.uk/policyhub/news_item/obesity_cars07.asp%29. Fair enough - reduce petrol prices for service industries - but for everyone else - man-up! If you chose to drive then pay for it. And government shouldn't go soft on you.

  • Comment number 94.

    67. At 16:37pm on 23rd Mar 2011, jon112dk wrote:
    49. At 15:51pm on 23rd Mar 2011, ToriesBrokeBritain

    Agreed -

    Bertie Wooster gives us a bogus cut in fuel taxes - which is only giving us our own money back. Then he recoups that from oil companies who will pass it on to the consumer.

    Bertie ends up with the same tax, the oil companies keep making the same profit, we keep on paying through the nose.

    Basically a scam so bertie can attempt to wiggle out of responsibility on fuel prices.

    ------------------------

    There's just no pleasing some people.

    Still, after 13 years of Labour’s ‘spin machine’, it's hardly surprising that some people have become so cynical.

  • Comment number 95.

    "He believes everyone could be Einstein if only they didn't have a private school 5 miles down the road from where they were taught. Something like that, isn't it Saga?" - andy @ 84

    This, as I'm certain you know, is a silly caricature of my thinking on the matter. Was Newton the man who discovered and explained gravity? Or a geezer who got hit on the head with an apple?

    Speaking of whom, you mention his great pal Einstein and it is interesting that Albert had little or nothing to do with the English private schools sector during his formative years. If he had, would we be thinking today that the 'space time continuum' was a deeply obscure, avante garde electro-pop group? Possibly.

  • Comment number 96.

    76. At 17:00pm on 23rd Mar 2011, pdavies65 wrote:
    Anyway, shouldn't we pushing petrol prices up not down? Discourage car use. Unpopular with the electorate in the short term perhaps but we should be thinking of our children (and our children's children).

    ----------------

    Only if the price is normalised over the entire Eurozone.

    All Labour achieved with this approach was to put British haulage firms out of business and flood the UK with East European HGVs. It didn't do much for the manufacturing sector either, and I speak from personal experience.

  • Comment number 97.

    @ 32, "The answer is not to tax people out of their cars - this was Labour's approach; just make it more and more expensive without any other choice".........

    Sorry matey, we can't blame labour for this one! It's been the policy of every government since the 60s. Neither can we blame Labour for a GLOBAL economic downturn. hint; the clue's in the word global ;-)

  • Comment number 98.

    "You would be quite surprised if you knew who I was." - Flame @ 89

    Now that's really got me wondering.

    Lenny Henry?

  • Comment number 99.

    42. At 15:44pm on 23rd Mar 2011, ToriesBrokeBritain wrote:

    Guess some people don't get it.

    The budget is just a big con, with give aways to Tory Party chums in Corporation Tax cuts!

    ---------------------

    That's right, it’s give-always to Tory Party chums.

    It's got nothing to with attracting businesses here and creating jobs, has it?

    Typical these lefties! One minute they're whining that he isn't doing anything to create growth (in the private sector) and then when he does do something, this is quickly 'spun' into, ‘he's helping out fat cats’ etc......


    You couldn’t make it up!


  • Comment number 100.

    89 Flame

    Are you Nick Clegg secretly lusting after Danny Alexander's hair colour?

 

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