Thursday, 28 June 2012

Green light for fuel U-turn

The cheering from the Conservative back benches when the Chancellor announced his change of heart on the proposed fuel tax increase this week was pure theatre. Only in Westminster would a panto-baddie be clapped for deciding not to take sweets from the kids after all. To his credit though, George Osborne went firmly onto the front foot, a deft move when simultaneously back-tracking. Without the intended 3p increase, he said; “fuel duty will be 10p a litre lower than planned by the last Labour government.”  Grasping the moral high-ground, or simply clutching at straws, it’s still a welcome break to anyone with a set of car keys. However, stating that the move would “fuel our recovery” may be a claim too far from the Chancellor. Not actively making something less likely could only be deemed encouragement through highly creative interpretation.

In contrast to an ensemble performance in the Commons, where the Chancellor relished the well-meant mumbling from a supporting cast of backbench Conservatives, when it came to defending the U-turn at the hands of Jeremy Paxman on Newsnight, Economic Secretary to the Treasury Chloe Smith was sent in alone. Only the day before, the Transport Minister Justine Greening had been pressing the case for the impending fuel tax increase, and now the Economic Secretary looked like she’d learnt of the U-turn in the taxi to the studio. Although some Paxman post-mortems can be surgical, this had all the finesse of a carpet beater, and Ms Smith had been hung out to dry.

A surprise to some it seems, yet after pasties, charities and caravans, the change of plan is not unprecedented, and follows intense cross-party pressure on No.11. The shadow chancellor Ed Balls had called for the rethink in an article in the Sun the same morning, saying “the government should be giving our economy a boost…not clobbering families, businesses and pensioners.” After the announcement, whilst welcoming the about-face on fuel duty, he added; “will he now also do a U-turn on the millionaire’s tax and rescind the granny-tax rise?” Don’t hold your breath, the lost fuel duty revenue alone amounts to around £550 million. Although it’s claimed the spare cash will come from underspends in other government departments, we are unlikely to learn which lucky budgets will be burgled before the Autumn, presumably  as the Treasury checks for loose change down the back of the Chesterfields.

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