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26 June 2012

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

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

By Caroline Crampton

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.

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