The Conservative Shadow Chancellor of the Exchequer George Osborne seems to be hinting that a future Conservative Government would "Do Something" about Fuel Duty on petrol and diesel.
The BBC reports:
Tories propose fuel duty changes
Sunday, 6 July 2008 16:37 UK
The Conservatives are proposing changes to the way fuel duty is calculated which they say would let government "share the pain" of rising prices.
Shadow chancellor George Osborne told the BBC the party was looking at plans to cut fuel duty when oil prices rise and increase it when prices fall.
If introduced last March, fuel would now be 5p a litre cheaper, he said.
The Treasury told the BBC the proposals were a gamble which could leave a £3bn hole in the public finances.
Fuel duty is due to rise in October but there has been speculation the increase will be delayed due to soaring oil prices.
But Mr Osborne told BBC One's Andrew Marr programme: "We are proposing a totally different way of doing fuel duty.
"Under the current system you wait for Gordon Brown to drop hints at select committees or Alistair Darling to come on this programme to make hints about what he may or may not do with the 2p.
"Not only is that an insult to families who want some clear direction from the government, but it is also extremely destabilising for the public finances."
Record oil price
He said the consultation process on a "fair fuel stabiliser" would begin on Sunday and conclude by the end of the year when the party would come up with a fully worked-out proposal. The policy is not yet a firm party pledge.
"What this would mean is that when the price of oil goes up, fuel duty comes down to help families, but the quid pro quo is that when the price of oil falls the duty goes up," said Mr Osborne.
"So government is sharing the pain of rising oil prices, but the government is also sharing the gain when oil prices fall."
How exactly would this work in practice ?
Presumably it is somewhere in between the current evil grasping Labour Government fuel tax regime, which, because of its fixed fuel duty plus periodic increases, plus VAT on top of that, grabs excessive taxes from the public as the price of crude oil rises, and a simpler fixed percentage tax which is automatically linked to the price of fuel at the refinery gate e.g. no Fuel Duty , but a VAT rate of 20% on fuel.
Is this is good idea ? How will they pay for any shortfall in public finances ? WiIl they make the tax collection system more or less complicated and bureaucratic ?
You can read the Conservative's Consultation Document:
A Fair Fuel Stabiliser: A consultation on the future of fuel taxation (.pdf)
Under a Fair Fuel Stabiliser, when fuel prices go up, fuel duty would fall. And when fuel prices go down, fuel duty would rise.
5.1 The closing date for responses to this consultation is 19 December 2008.
5.2 Responses should be sent to:
Fair Fuel Stabiliser Consultation
Office of the Shadow Chancellor, George Osborne MP
House of Commons
5.3 Or by email to email@example.com Please include the words 'Fair Fuel Stabiliser Consultation' in the subject.
5.4 Responses to this consultation will be used to inform our policy development
Presumably, the relatively lengthy consultation period is designed to tempt the unpopular Labour Prime Minister Gordon Brown and his hapless Chancellor of the Exchequer Alistair Darling, to try their usual NuLabour "political triangulation" trick of responding, to Tory taxation ideas, and then spinning the media, and pretending that they thought of it themselves (like the capital gains tax idea), before the next scheduled 2p per litre rise in Fuel Duty is confirmed or is abandoned in October.