Why a “fair fuel stabiliser” would be bad policy

The government does not receive a “windfall” from higher petrol prices.

There's a notable interview with Robert Chote, the head of the Office for Budget Responsibility, in today's Financial Times in which he repudiates the notion of a "fair fuel stabiliser".

Philip Hammond, the Transport Secretary, has promised to "look at the practicality" of this measure in time for the next Budget and the government is under significant pressure from the tabloids to limit petrol prices. But Chote warns that the fuel stabiliser is premised on the false assumption that the state receives a windfall in tax revenues when oil prices rise. In fact, higher prices rarely increase revenue because of the overall effect on economic performance.

Chote refers to a summer analysis by the OBR which concluded that the "overall effect of a temporary oil-price rise would be 'close to zero' " and that "a permanent rise would create a loss to the public finances". This is because higher pump prices "reduce the demand for fuel, lowering fuel duty receipts" and push up the indexation of tax thresholds, benefits, public-service pensions and index-linked gilts.

As the data below confirms, higher oil prices would generally lead to a fall in tax revenues.

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This doesn't mean that a fuel stabiliser is unworkable, but it does mean that the government would need to raise taxes elsewhere if it lowered duty on petrol.

Chote's conclusion is that "a fair fuel stabiliser would be likely to make the public finances less stable rather than more stable". But will ministers put short-term political considerations first? We'll soon find out.

George Eaton is political editor of the New Statesman.

#Match4Lara
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#Match4Lara: Lara has found her match, but the search for mixed-race donors isn't over

A UK blood cancer charity has seen an "unprecedented spike" in donors from mixed race and ethnic minority backgrounds since the campaign started. 

Lara Casalotti, the 24-year-old known round the world for her family's race to find her a stem cell donor, has found her match. As long as all goes ahead as planned, she will undergo a transplant in March.

Casalotti was diagnosed with acute myeloid leukaemia in December, and doctors predicted that she would need a stem cell transplant by April. As I wrote a few weeks ago, her Thai-Italian heritage was a stumbling block, both thanks to biology (successful donors tend to fit your racial profile), and the fact that mixed-race people only make up around 3 per cent of international stem cell registries. The number of non-mixed minorities is also relatively low. 

That's why Casalotti's family launched a high profile campaign in the US, Thailand, Italy and the US to encourage more people - especially those from mixed or minority backgrounds - to register. It worked: the family estimates that upwards of 20,000 people have signed up through the campaign in less than a month.

Anthony Nolan, the blood cancer charity, also reported an "unprecedented spike" of donors from black, Asian, ethcnic minority or mixed race backgrounds. At certain points in the campaign over half of those signing up were from these groups, the highest proportion ever seen by the charity. 

Interestingly, it's not particularly likely that the campaign found Casalotti her match. Patient confidentiality regulations protect the nationality and identity of the donor, but Emily Rosselli from Anthony Nolan tells me that most patients don't find their donors through individual campaigns: 

 It’s usually unlikely that an individual finds their own match through their own campaign purely because there are tens of thousands of tissue types out there and hundreds of people around the world joining donor registers every day (which currently stand at 26 million).

Though we can't know for sure, it's more likely that Casalotti's campaign will help scores of people from these backgrounds in future, as it has (and may continue to) increased donations from much-needed groups. To that end, the Match4Lara campaign is continuing: the family has said that drives and events over the next few weeks will go ahead. 

You can sign up to the registry in your country via the Match4Lara website here.

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.