Gordon Brown and the economy

[4GS]

He's been flouncing around the TV stations this morning saying that high oil and food prices are a worldwide problem and not just in the UK, and that he was committed to doing everything he can to help get the economy back on track.

I'm not blessed with the brains of a scientist, but wouldn't taking 2p (tax) off a liter of diesel help reduce the running costs of transport companies., thus reducing the transportation costs of foodstuffs, which in turn reduces the price of food in the supermarkets.

Or is this too simple a solution? Would taking some of the tax from fuel make the country bankrupt

[R1Geezer]

It ain't a solution, if the gov dropped 2p the forecourts would say thanks very much, the actual price would not change.

[jake-the-peg]

In 2002 the EU tried to get a unified Diesel tax rate across Europe to level the playing field for hauliers

http://news.bbc.co.uk/1/hi/business/2143941.st m

The UK pretty comprehensively stopped it.

http://findarticles.com/p/articles/mi_qn4159/i s_20030112/ai_n9682903

So next time anybody is talking about what good the EU is remember it's the UK government rather than the EU which is keeping fuel tax high!

[4GS]

That's my point Jake.
He's full of hot air, empty broken promises and waffle.
There's a by-election coming up, it will be interesting to see what happens there

[ethandron]

Don't forget there is VAT on fuel so that every time the cost goes up the gov't rake in some more tax. The very high prices at the moment is like a windfall to the treasury. The gov't are spending too much money and are having to borrow to fund their plans so the last thing they will do is reduce any taxes unless they are forced into it like the 10p **** up.

[4GS]

At the last fuel protests the Government was making �1,000 every second from petrol and diesel, God only knows how much they're raking in now, and if anyone has the balls to say anything they (the spin doctors) say that cutting fuel tax would make the NHS + pensioners suffer cuts

[keyplus90]

As a country we are not Earning money. No foreign exchange because we do not have any industry. Biggest industry for long time had been Education Sector for overseas people who used to come here for higher education. Now majority goes to USA because it is cheaper there.

So when we are not earning money then we are Recycling it as taxes.

[4GS]

keyplus
We do earn, it's called invisible earnings which comes from such things as tourism, insurance etc
http://archive.treasury.gov.uk/pub/html/top/to p7/main.html

An example being, when I was an instructor at the School of Infantry, we taught minor battlefield tactics to junior officers from the British Army. Occasionally we had overseas students on courses from friendly countries such as Saudi Arabia, Malaya etc.

Having just one overseas student paid for the entire course, and more countries send their junior officers to be trained by the British Army than by the the Americans

[jake-the-peg]

Dropping taxes to stimulate the economy is always a delicate business.

If it's done smartly and well it can stimulate confidence in the economy which leads to more growth from which more tax revenue is gained.

If it's done badly....Well I recall Margaret Thatcher called it the "Trickledown effect" slashing taxes for the higher earners which was meant to have the same effect.

In reality the money went straight out of the country in German cars and foreign holidays and villas in Tuscany etc.

The problem at the moment is mainly one of confidence, people around the world think they're likely to be worse off next year and are tightening their belts which is reducing the size of the economy.

I don't think knocking 2p off of a litre of Diesel is going to fix that.

We've had over 10 years of economic growth in this country, even when the rest of the western world was suffering - did we all really start to think that things could improve every year for ever?

[4GS]

jake
The 2p tax cut was a ball park figure I randomly plucked from the air.

You are correct in saying that we've had ten years of economic growth, however, this has been paid for by the Govt, (Brown when he was Chancellor) borrowing hand over fist, something had to give, as many a person in the UK with credit cards will tell you, when you keep on borrowing eventually you have to pay it back or go bust!!

[ludwig]

Clearly what we need to do is increase taxation on the lowest paid and use the revenue to fund headline grabbing cuts for the better off - a sort of 'trickle up' effect.
That would make more sense than tinkering with petrol prices.

[DarkMajes71c]

its just part of an economic cycle growth recession more growth recession we are due for a major recession which will probably be ended by a large scale war... (see WW2) just hope they dont start tossing nukes around like bullets.

[sp1214]

With the price of fuel going up about 30 p over the past year even a misely tuppence would have no effect. Why don't the government remove the tax entirely from petrol and diesel and put it on something else. I'm sure there are many people out there who can help the government out on this. What about the higher rates of income tax for a start?

[Lonnie]

Why doesn't someone ask the PM why we now have the most expensive fuel in the world.

Maybe someone has, and I don't know, but I don't think so.

[vehelpfulguy]

>We've had over 10 years of economic growth in this country,

Oh so borrowing money so the country is now massively in debt is now called "economic growth".

Any idiot can borrow money and make it look like growth.

The trouble is you have to pay it back afterwards, but Labour never worry about that sort of thing.