Budget 2013: George Osborne must scrap the fuel duty rise

Families urgently need help with the cost of living. The Chancellor should take action on fuel duty and then examine a 10p tax rate.

I am a moderniser. But I believe that the one area of modernisation that the Conservative Party should focus on is helping those on lower incomes, who are struggling to make a living. We need a Ronseal politics, which is easy to define. This is not about getting hung up about backgrounds, or what school you went to. In fact, most families would love to send their children to posh schools. But it's about being on the side of the poorest, even if we don't believe in the big state redistributionist welfarism of the Labour Party. David Cameron’s declaration that "Conservatives are not the party of the better off, but the party for the want-to-be-better-off" should run through everything that we do - every speech, every Budget line, every policy decision. It must be our narrative, our metaphorical "washing line", holding all the clothes pegs together.

 
This means picking some battles. Policies only get attention if there is a scrap to get them through. I will come on to the cost of living in a moment, but other suggestions might include support for the family around housing and the right to buy; the cost of childcare; and Michael Gove’s education reforms. These need to be pursued relentlessly, both through intellectual firepower and personal stories. A mirror image of what Labour have done on the 50p rate.
 
Modernisation also means being counter-intuitive. Conservatives should not be afraid to appropriate the language of the left, or build alliances with trade unions, pressure groups and the Big Society. We must show that our policies are compassionate. Language and manner are incredibly important.
 
So when it comes to the Budget, this means a focus on lower earners and the cost of living. There is no more toxic tax than fuel duty. In my constituency of Harlow, the question is not whether you can afford to have a car, but whether you can afford not to. Like it or not, Britain is a great car economy. Seventy one per cent of us still drive to work. Rocketing fuel prices are also draining investment away from the more productive parts of the economy. The AA estimates that a 3p rise at the pumps switches an extra £1.8m into fuel sales, out of peoples’ pockets, every day. In 2011, Sir Terry Leahy of Tesco blamed fuel prices for the GDP slowdown, saying: "Filling up the family car has gone up 70 per cent in two years, causing what was a steady recovery to go sideways."
 
Petrol prices are also an issue of social justice. In reality, fuel duty is a tax on everything as it pushes up the cost of public transport and road haulage. In November 2011, the ONS stated that fuel taxes are shockingly regressive. Two years ago, an ordinary car-owner in Harlow was spending £1,700 a year on filling up the family car. Sadly, this trend has got worse, not better. According to the RAC Foundation, 800,000 British families now spend a quarter of their income on running a car. The poorest decile of households in the UK are shelling out at least 27 per cent of their disposable income on buying and running a vehicle. This is a national scandal. Given that two-thirds of the pump-price of petrol and diesel is tax, this is largely a crisis of our own making. All sensible people agree that taxes should be broadly progressive. That is why fuel duty needs reform.
 
George Osborne gets this. He has cancelled or delayed every single fuel duty rise that Labour left behind in their 2009 and 2010 Budgets - and he has done this at a time of immense strain on the public finances.
 
Fuel is now 10p cheaper per litre as a result. According to the AA, that has meant £6m more for families to spend in Britain’s real economy, every single day; £2.2bn more annually left in Britain’s collective pocket. Given his record, I am urging the Chancellor to go further in this Budget and to scrap September’s planned rise in fuel duty.
 
The second campaign that I am pressing for - in the longer term - is a major tax reform: something that is easily understood; is totemic; and helps those on lowest incomes. Namely: the restoration of the 10p income tax-rate. I believe that progressive reductions of income tax must be a moral mission for Conservatives. For example, a 10p band introduced above the current personal allowance (say between £9,440 and £12,000) would hand back more than £250 a year to a worker on minimum wage, and would help them to earn much closer to a living wage in cash-terms. Conservatives could also look to widen out a 10p band over time. This could help more middle earners as well.
 
Restoring a proper, generous 10p rate would be totemic. People would notice it. In my view, Ed Miliband's half-hearted conversion to the idea was a missed opportunity, as Labour’s proposals would only mean an extra £34 a year for a family (according to Policy Exchange) and even their new "mansion tax" doesn't fund it all. Such a tax will set a dangerous precedent, and no doubt will rapidly become a "homes tax" as the band gets lower and lower. That's not what Britain needs. Besides, the coalition have already brought in a de facto "mansion tax" by hiking stamp duty on more expensive homes. What we need instead is a substantive income tax reform - as set out on Great Gordon Brown Repeal Bill
 
Some people say, "just keep raising the personal allowance". I think this would be unwise. Everyone should pay something towards public services, even if only a little. Nigel Lawson started off as a Chancellor prioritising tax allowances. But later he changed course. He said: "I wished to create a large constituency in favour of income-tax reductions. The last thing I wanted to do was to reduce the size of that constituency by taking people out of tax altogether."
 
Consider a second analogy. Suppose that you and your friends have have gone out to an expensive restaurant for a large meal, and finally it comes to splitting the bill. Under my proposals, most people would still contribute something, albeit the poorest would pay the least as a share of their income. But is it really sensible that more and more of the table have a totally free ride, on the grounds that this "avoids complexity"? As a Conservative, this makes me uneasy. What lavish choices will your friends order next time, if they know that you are paying the cheque?
 
For the Budget next week, money is tight. So how might we pay for a freeze in fuel duty? There are many places to start: restricting elderly benefits to poorer pensioners, for example, or ringfencing the extra revenues that are expected from the new 45p rate of income tax. But it is striking, how one-sided this debate is. Whenever one argues for tax cuts, there is a clamour of voices saying, "how are you going to pay for it?" And yet, when large unfunded rises in government spending are announced - Vince Cable’s £1bn "British business bank" for example, or several of DECC’s carbon schemes - nobody really asks where the money is coming from. Fiscal discipline must be about controlling spending, as much as a broad tax base.
 
But, however it is paid for, families urgently need help with the cost of living. If Conservatives are to win the next general election, it will be because we have helped fundamentally with things like the cost of filling up the family car. Fuel duty has become a toxic tax. Keeping petrol and diesel costs down will reduce poverty, help to boost jobs, and secure the GDP growth that we so desperately need. When the economy recovers, then we can look at other reforms - such as the 10p rate - but what we need right now is a cost of living Budget
 
Robert Halfon is Conservative MP for Harlow. He tweets at @halfon4harlowMP

 

Fuel duty protestors stand outside Parliament on March 7, 2012 in London. Photograph: Getty Images.

Robert Halfon is Conservative MP for Harlow. He tweets at @halfon4harlowMP

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Theresa May’s stage-managed election campaign keeps the public at bay

Jeremy Corbyn’s approach may be chaotic, but at least it’s more authentic.

The worst part about running an election campaign for a politician? Having to meet the general public. Those ordinary folk can be a tricky lot, with their lack of regard for being on-message, and their pesky real-life concerns.

But it looks like Theresa May has decided to avoid this inconvenience altogether during this snap general election campaign, as it turns out her visit to Leeds last night was so stage-managed that she barely had to face the public.

Accusations have been whizzing around online that at a campaign event at the Shine building in Leeds, the Prime Minister spoke to a room full of guests invited by the party, rather than local people or people who work in the building’s office space.

The Telegraph’s Chris Hope tweeted a picture of the room in which May was addressing her audience yesterday evening a little before 7pm. He pointed out that, being in Leeds, she was in “Labour territory”:

But a few locals who spied this picture online claimed that the audience did not look like who you’d expect to see congregated at Shine – a grade II-listed Victorian school that has been renovated into a community project housing office space and meeting rooms.

“Ask why she didn’t meet any of the people at the business who work in that beautiful building. Everyone there was an invite-only Tory,” tweeted Rik Kendell, a Leeds-based developer and designer who says he works in the Shine building. “She didn’t arrive until we’d all left for the day. Everyone in the building past 6pm was invite-only . . . They seemed to seek out the most clinical corner for their PR photos. Such a beautiful building to work in.”

Other tweeters also found the snapshot jarring:

Shine’s founders have pointed out that they didn’t host or invite Theresa May – rather the party hired out the space for a private event: “All visitors pay for meeting space in Shine and we do not seek out, bid for, or otherwise host any political parties,” wrote managing director Dawn O'Keefe. The guestlist was not down to Shine, but to the Tory party.

The audience consisted of journalists and around 150 Tory activists, according to the Guardian. This was instead of employees from the 16 offices housed in the building. I have asked the Conservative Party for clarification of who was in the audience and whether it was invite-only and am awaiting its response.

Jeremy Corbyn accused May of “hiding from the public”, and local Labour MP Richard Burgon commented that, “like a medieval monarch, she simply briefly relocated her travelling court of admirers to town and then moved on without so much as a nod to the people she considers to be her lowly subjects”.

But it doesn’t look like the Tories’ painstaking stage-management is a fool-proof plan. Having uniform audiences of the party faithful on the campaign trail seems to be confusing the Prime Minister somewhat. During a visit to a (rather sparsely populated) factory in Clay Cross, Derbyshire, yesterday, she appeared to forget where exactly on the campaign trail she was:

The management of Corbyn’s campaign has also resulted in gaffes – but for opposite reasons. A slightly more chaotic approach has led to him facing the wrong way, with his back to the cameras.

Corbyn’s blunder is born out of his instinct to address the crowd rather than the cameras – May’s problem is the other way round. Both, however, seem far more comfortable talking to the party faithful, even if they are venturing out of safe seat territory.

Anoosh Chakelian is senior writer at the New Statesman.

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