The fuel duty U-turn shows how afraid Osborne is of Tory backbenchers

The mere threat of a rebellion from Conservative backbenchers was enough.

Did Ed Balls get lucky, or did Osborne really scrap the planned 3p rise in fuel duty in response to the shadow chancellor’s Sun article this morning?

George Osborne said at Treasury Questions this afternoon that "We will now stop any rise in fuel duty this August, and freeze it for the rest of the year” because the government is "on the side of working families". The freeze is to be paid for by “lower than expected departmental spending", he said.
Politics aside for a second, this is good news for those struggling to make ends meet. Treasury sources tell PoliticsHome that the freeze will save the average family £160 over 2 years.

The 3p rise was announced in the Budget, and this freeze is just the latest in a series of U-turns on measures it contained. There’ll be plenty of people agreeing with Gaby Hinsliff’s sentiment - why have a Budget at all if so much of it is going to be reversed in the following weeks and months?

This isn’t the first time fuel duty has proved to be a political flashpoint. In last year’s autumn statement, Osborne scrapped a planned rise in January, but pledged that the August rise would go ahead. But since then, a concerted campaign by road users’ pressure groups and MPs has been eating away slowly but surely at the government’s enthusiasm for this. Indeed, the very fact that the most high profile MPs in the FairFuelUK campaign, Robert Halfon and Martin Vickers, are Conservatives should have been an early warning sign for Osborne and co. Coupled with the potential public outrage hinted at by the fuel shortage earlier this year, it's plain old fear of greater unpopularity we can chalk this one up to.

In his article this morning, Balls called for Tories to rebel and join Labour in forcing a vote on the issue, and it is this that is really at the bottom of this. Balls was fortunate in the timing of his call for the duty to be scrapped, but hasn’t really benefited long-term from the ‘victory’ over Osborne. Today’s U-turn shows that the government is more afraid of Conservative backbenchers than almost anything else.


A protestor holds up an anti-fuel rise placard outside Parliament. Photograph: Getty Images

Caroline Crampton is web editor of the New Statesman.

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.