The Cost of Living Is Not the Cost of Fuel — It Is the Cost of the State

by Ram ben Ze’ev

The Cost of Living Is Not the Cost of Fuel — It Is the Cost of the State

People are in the streets of London protesting the cost of fuel, and they are right to be angry—but they are aiming at the symptom, not the cause.

The narrative being pushed is familiar: global instability, tensions in the Middle East, supply pressures. These are convenient explanations. They shift blame outward. But the uncomfortable truth is far closer to home.

The underlying cost of fuel itself is only a fraction of what people pay at the pump. While the exact base cost fluctuates, it is nowhere near the £1.40–£1.70 per litre that drivers currently face. A substantial portion—often well over half—is taxation: fuel duty, VAT, and layered policy costs. In simple terms, the State is the primary driver of the price.

But this is only the surface of the issue.

The deeper problem is not fuel. It is government spending.

The graphic tells the story clearly. A couple of years ago, the UK government was spending approximately £15,547 per person annually. This is not per taxpayer. It is per person.

Now consider a typical household.

A family of four represents: 4 × £15,547 = £62,188 per year in government spending.

That is the cost of the State for that household.

Now ask a simple question: how many families in Britain pay £62,188 per year in tax?

Answer: Very few.

Even households earning £50,000–£70,000 are not contributing anywhere near that level of tax once allowances, thresholds, and actual effective rates are applied. The reality is stark: most households receive more in public spending than they contribute in taxation.

This is not a moral judgment. It is arithmetic.

The immediate response is predictable: “But I don’t directly receive most of that.”

That is true. Much of the spending is indirect—healthcare, pensions, welfare systems, debt interest, public infrastructure. But indirect does not mean free. It means collectively paid.

And collectively, the system does not balance.

The government does not have any money. Everything is paid for through tax, paid for by the taxpayers. When a government spends more than it receives, it must borrow. It issues bonds. It takes loans. It pushes the burden forward into the future for the taxpayers to pay. And when borrowing becomes insufficient, it resorts to inflationary policies that silently tax everyone through the erosion of purchasing power.

This is where fuel taxes come back into the picture.

Fuel is easy to tax. It is unavoidable. It is universal. Every litre sold becomes a reliable stream of revenue. When the State needs more money, fuel becomes a lever. And even if you do not drive, you still pay it—because businesses pass these costs on through the price of the goods and services you buy. This is not a tax on drivers. It is a tax on everyone.

So the protester standing at the petrol station is not wrong—but he is protesting the last link in a long chain.

The real issue is that the State has grown beyond what the tax base can sustainably support.

And here is the unavoidable conclusion:

Something must give.

There are only three possible outcomes:

Taxes increase.

Spending is reduced.

Debt obligations fail.

In reality, all three will happen—gradually at first, and then suddenly.

History shows that systems like this do not stabilise indefinitely. They stretch. They adjust. They mask. And then, when the limits are reached, they break.

In The Sun Also Rises by Ernest Hemingway wrote:

“How did you go bankrupt?”

“Two ways. Gradually, then suddenly.”

Yet in the midst of this, we continue to encourage “charitable giving” through tax incentives.

Individuals are permitted to reduce their tax liability by directing funds to organisations of their choosing, while those organisations often operate entirely free of tax themselves.

The result is a double distortion.

The State forgoes revenue.

The public still funds the gap.

The question that must now be asked is simple and unavoidable:

Should individuals be allowed to divert tax through deductions while the general system is under strain?

Or should all income be taxed equally, and all spending decisions made transparently?

This is not about opposing charity. It is about recognising that nothing in this system is truly free. Every exemption, every relief, every benefit—someone pays.

At present, the system relies on a shrinking base of net contributors supporting an expanding structure of spending. That imbalance is not theoretical. It is measurable. It is visible in fuel prices, in borrowing levels, and in the quiet but persistent rise of taxation.

The protests will continue. The frustration will grow. But until the focus shifts from the price at the pump to the size of the State itself, the root cause will remain untouched.

The cost of living is not the cost of fuel.

It is the cost of everything that sits behind it.

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Bill White (Ram ben Ze'ev) is CEO of WireNews Limited, Mayside Partners Limited, MEADHANAN Agency, Kestrel Assets Limited, SpudsToGo Limited and Executive Director of Hebrew Synagogue