Johnny Porritt asks a question:
"Moreover, the less well-off are being disproportionately hammered, and the hikes in fuel taxes are far from fiscally neutral and never have been.
So, economically, socially, ethically, what are the implications of all that?
Your thoughts really welcome. As the Government’s official advisers on such matters, what do you think the SDC’s advice should be?"
The advice should be that the Government should be consistent. Looking at the Stern Review we get a social cost for CO2 emissions of $85 per tonne. That is thus the correct amount by which emissions should be taxed to cover their social costs (and yes, of course, this does cover climate change issues).
That translates into roughly 11 p per litre of petrol. The fuel duty escalator has added some 23 p since 1993 to the price of a litre of petrol (without this autumn’s proposed rise).
Thus, if the government accepts the conclusions of the Stern Review, which it says that it does, it should cut fuel duty by 12 p a litre.
Anyone arguing that it should raise it further is simply rejecting the scientific consensus, aren’t they?