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 assistant editor of the New Statesman.

Photo: Getty
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The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.