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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Want to send a positive Brexit message to Europe? Back Arsene Wenger for England manager

Boris Johnson could make a gesture of goodwill. 

It is hard not to feel some sympathy for Sam Allardyce, who coveted the England job for so many years, before losing it after playing just a single match. Yet Allardyce has only himself to blame and the Football Association were right to move quickly to end his tenure.

There are many candidates for the job. The experience of Alan Pardew and the potential of Eddie Howe make them strong contenders. The FA's reported interest in Ralf Rangner sent most of us scurrying to Google to find out who the little known Leipzig manager is. But the standout contender is Arsenal's French boss Arsene Wenger, 

Would England fans accept a foreign manager? The experience of Sven Goran-Eriksson suggests so, especially when the results are good. Nobody complained about having a Swede in charge the night that England won 5-1 in Munich, though Sven's sides never won the glittering prizes, the Swede proving perhaps too rigidly English in his commitment to the 4-4-2 formation.

Fabio Capello's brief stint was less successful. He never seemed happy in the English game, preferring to give interviews in Italian. That perhaps contributed to his abrupt departure, falling out with his FA bosses after he seemed unable to understand why allegations of racial abuse by the England captain had to be taken seriously by the governing body.

Arsene Wenger could not be more different. Almost unknown when he arrived to "Arsene Who?" headlines two decades ago, he became as much part of North London folklore as all-time great Arsenal and Spurs bosses, Herbert Chapman or Bill Nicholson, his own Invicibles once dominating the premier league without losing a game all season. There has been more frustration since the move from Highbury to the Emirates, but Wenger's track record means he ranks among the greatest managers of the last hundred years - and he could surely do a job for England.

Arsene is a European Anglophile. While the media debate whether or not the FA Cup has lost its place in our hearts, Wenger has no doubt that its magic still matters, which may be why his Arsenal sides have kept on winning it so often. Wenger manages a multinational team but England's football traditions have certainly got under his skin. The Arsenal boss has changed his mind about emulating the continental innovation of a winter break. "I would cry if you changed that", he has said, citing his love of Boxing Day football as part of the popular tradition of English football.

Obviously, the FA must make this decision on football grounds. It is an important one to get right. Fifty years of hurt still haven't stopped us dreaming, but losing to Iceland this summer while watching Wales march to the semi-finals certainly tested any lingering optimism. Wenger was as gutted as anybody. "This is my second country. I was absolutely on my knees when we lost to Iceland. I couldn't believe it" he said.

The man to turn things around must clearly be chosen on merit. But I wonder if our new Foreign Secretary Boris Johnson - albeit more of a rugger man himself - might be tempted to quietly  suggest in the corridors of footballing power that the appointment could play an unlikely role in helping to get the mood music in place which would help to secure the best Brexit deal for Britain, and for Europe too.

Johnson does have one serious bit of unfinished business from the referendum campaign: to persuade his new boss Theresa May that the commitments made to European nationals in Britain must be honoured in full.  The government should speed up its response and put that guarantee in place. 

Nor should that commitment to 3m of our neighbours and friends be made grudgingly.

So Boris should also come out and back Arsene for the England job, as a very good symbolic way to show that we will continue to celebrate the Europeans here who contribute so much to our society.

British negotiators will be watching the twists and turns of the battle for the Elysee Palace, to see whether Alain Juppe, Nicolas Sarkozy end up as President. It is a reminder that other countries face domestic pressures over the negotiations to come too. So the political negotiations will be tough - but we should make sure our social and cultural relations with Europe remain warm.

More than half of Britons voted to leave the political structures of the European Union in June. Most voters on both sides of the referendum had little love of the Brussels institutions, or indeed any understanding of what they do.

But how can we ensure that our European neighbours and friends understand and hear that this was no rejection of them - and that so many of the ways that we engage with our fellow Europeans rom family ties to foreign holidays, the European contributions to making our society that bit better - the baguettes and cappuccinos, cultural links and sporting heroes remain as much loved as ever.

We will see that this weekend when nobody in the golf clubs will be asking who voted Remain and who voted Leave as we cheer on our European team - seven Brits playing in the twelve-strong side, alongside their Spanish, Belgian, German, Irish and Swedish team-mates.

And now another important opportunity to get that message across suddenly presents itself.

Wenger for England. What better post-Brexit commitment to a new Entente Cordiale could we possibly make?

Sunder Katwala is director of British Future and former general secretary of the Fabian Society.