5 out of 10 for Osborne?

George Osborne has struck a cord with many who are finding the fuel price increase a great burden. In political terms, therefore, he has scored.

But could this be permanent? It is attractive to think that receipts from fuel taxes will be limited, but is this what we would want, when his earlier statements were to the effect "When we put up the taxes on pollutants, we shall reduce taxes elsewhere.

If we are trying to send out the message that fuel is becoming scarce and damaging, then price should be allowed to do its work - discouraging consumption and use, by encouraging people to share cars, buy more efficient cars, use public transport, drive considerately and avoiding short journeys to school or shopping when the engine is cold and inefficient. There are already signs of these "economies" taking place, and price is doing its work.

But, and it is a very big but, if the Treasury rakes in extra cash, we should reduce taxes elsewhere. The obvious place to reduce taxes is on the fixed taxes of transport, chiefly road tax. If we reduced road tax , we could arrange that some of the higher costs of fuel were neutralised.
Of course high mileage users would not be completely compensated, but then they are the ones who are doing the most environmental damage.

The benefit here would be that those who need a car only for occasional trips, for holiday or to see granny, etc., would not be penalised because of the excessive fixed tax, and thus making short and few journeys too expensive.

The policy of the present government is so non-rational as to make it clear that their only interest is to raise money. Owners of large cars, assumed to be rich, will pay more and owners of smaller cars, assumed to be poor, will pay less.

Their argument overlooks two things. Firstly that high petrol users, whatever size of engine, are paying more in petrol duties, and secondly that cars which have be assessed as having lower emissions may in fact do higher mileages and thus do more environmental damage, and large engineered cars may emit less over a year than small cars.

The argument is typical of a Government which adopts crude policies on political grounds. If the object is to reduce the consumption of fuel and the damage to the environment, then the price of fuel itself will go a long way to achieving this. Administrative solutions are usually expensive to run and often fail to achieve their objectives. The discriminatory Vehicle Excise Duty is a case in point.