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States dithers over fuel duty solution

Guernsey Press Comment | Published:

FUEL duty is a classic example of why islanders get so frustrated with the States.

The question of what to do about falling revenues from the pumps has been on the agenda for years.

Consumption has been falling by 2-3% a year to the point where it has gone from 34 million litres a decade ago to less than 30 million litres in 2018.

While that is good news from an environmental stance, the States cannot afford to lose £400,000 each year in duty income.

The political response so far has been unimaginative: hike duty up each year.

This, of course, creates a virtuous/vicious circle. The more the price goes up the more people look for ways to use less fuel.

Buses, electric bikes, walking, car sharing, buying fuel abroad, staying at home… there are myriad ways of dodging the taxman.

Meanwhile, taxi drivers and delivery vans are hit hard and £20m. of the States’ annual revenue is under threat.

All of this has long been obvious.

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In June last year, Deputy Peter Roffey proposed an amendment calling on Policy & Resources to find an answer. He did not specify what that solution might be, just that they look for the best way to maintain revenues given fuel sales.

Only one deputy voiced dissent.

Even P&R president Gavin St Pier supported it. He was not enthusiastic but recognised that it was a problem that needed to be tackled.

The motion passed without a recorded vote.

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Fifteen months on, the working party set up to look at the problem has reported back to P&R. The advisory group contained not only Deputy Roffey but members of Environment and, crucially, P&R.

Their advice was to bring back an annual fee similar to motor tax. As fuel use lessened, the annual tax would rise to keep revenues in balance.

Except P&R rejected their plan and, in this year’s Budget, again propose increasing fuel duty.

They have no alternative solution, only something vague about waiting for an over-arching energy policy to be created and something worrying about taxing green vehicles.

So we have identified a problem that everybody agrees urgently needs tackling, mandated a committee to find a solution, given them months to talk it through.

And then nothing happens.

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