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| Fuel price rises will hurt the worst-off – just like other broken Tory promises | Fuel price rises will hurt the worst-off – just like other broken Tory promises |
| (3 months later) | |
| It’s been one of the most successful lobbying campaigns in modern political history, successfully diverting billions from the Treasury with barely a squeak. But almost eight years on, it seems the campaign to freeze fuel duty has finally run out of road. The chancellor is now considering risking the combined wrath of white-van man, the Sun, and half his backbenchers by pushing up pump prices again, and while it’s ostensibly all to fund the NHS (the one thing for which prospective Tory voters will grudgingly pay more tax) that feels like only part of the story. | It’s been one of the most successful lobbying campaigns in modern political history, successfully diverting billions from the Treasury with barely a squeak. But almost eight years on, it seems the campaign to freeze fuel duty has finally run out of road. The chancellor is now considering risking the combined wrath of white-van man, the Sun, and half his backbenchers by pushing up pump prices again, and while it’s ostensibly all to fund the NHS (the one thing for which prospective Tory voters will grudgingly pay more tax) that feels like only part of the story. |
| If he hadn’t bitten this particular bullet now, Philip Hammond would have had to do so soon, because the nature of driving is changing. Assuming ministers are serious about wanting to phase out new petrol and diesel cars by 2040 for environmental reasons, fuel sales should tumble over the coming years as people switch to hybrid or electric models and that means revenue from fuel tax falling too. Even if Hammond just wanted to keep raising the sort of cash chancellors are used to raising from motorists, never mind raising more, logic suggests that either fuel duty will have to rise or he’ll have to find new and equally unloved ways of taxing drivers such as charging for road use. Perish the thought that, having been forced to conjure up £20bn from nowhere for the NHS, the chancellor might use that as cover for smuggling through a few overdue hard choices. But you can certainly see the temptation. | If he hadn’t bitten this particular bullet now, Philip Hammond would have had to do so soon, because the nature of driving is changing. Assuming ministers are serious about wanting to phase out new petrol and diesel cars by 2040 for environmental reasons, fuel sales should tumble over the coming years as people switch to hybrid or electric models and that means revenue from fuel tax falling too. Even if Hammond just wanted to keep raising the sort of cash chancellors are used to raising from motorists, never mind raising more, logic suggests that either fuel duty will have to rise or he’ll have to find new and equally unloved ways of taxing drivers such as charging for road use. Perish the thought that, having been forced to conjure up £20bn from nowhere for the NHS, the chancellor might use that as cover for smuggling through a few overdue hard choices. But you can certainly see the temptation. |
| Those cheering rising fuel taxes on the understandable grounds that reducing mileage could help save the planet need to be honest about how painful this will be for some. True, a measure portrayed as helping lower earners through a recession also quietly subsidised millions of drivers who didn’t need it half as much. But it’s ridiculous to pretend that everyone can now stop making unnecessary car journeys and cheerily take the Tube instead when millions live in places where public transport is either non-existent or expensive and unreliable, and when people on low incomes already think twice about every mile they drive. Wealthier motorists will probably grumble but carry on clocking up the miles, or else buy a hybrid. But poorer ones running cars they can’t afford to replace will have to prioritise getting themselves to work and the kids to school (no, they can’t always just walk, if parents themselves want to get to work on time) and cut back on pleasures such as driving to see relatives. Rising costs for hauliers, meanwhile, could translate into prices rising in shops just as Brexit starts to bite. There’s a strong green case for motoring taxes to rise as part of an eco-friendly package including measures to cushion drivers on low incomes, but how does that work if all the money’s going to the NHS? | Those cheering rising fuel taxes on the understandable grounds that reducing mileage could help save the planet need to be honest about how painful this will be for some. True, a measure portrayed as helping lower earners through a recession also quietly subsidised millions of drivers who didn’t need it half as much. But it’s ridiculous to pretend that everyone can now stop making unnecessary car journeys and cheerily take the Tube instead when millions live in places where public transport is either non-existent or expensive and unreliable, and when people on low incomes already think twice about every mile they drive. Wealthier motorists will probably grumble but carry on clocking up the miles, or else buy a hybrid. But poorer ones running cars they can’t afford to replace will have to prioritise getting themselves to work and the kids to school (no, they can’t always just walk, if parents themselves want to get to work on time) and cut back on pleasures such as driving to see relatives. Rising costs for hauliers, meanwhile, could translate into prices rising in shops just as Brexit starts to bite. There’s a strong green case for motoring taxes to rise as part of an eco-friendly package including measures to cushion drivers on low incomes, but how does that work if all the money’s going to the NHS? |
| That it will is not, of course, a done deal yet. Some senior Cabinet ministers were thought to favour one simple measure that can be branded as an “NHS tax” – like Tony Blair and Gordon Brown’s national insurance hike – and covers the cost in full, leaving wriggle room for bailing out other struggling public services from the proceeds of whatever growth Brexit allows. Prisons are busting at the seams, local government’s barely coping, and just because the defence secretary Gavin Williamson sounds like a latter-day Alan Partridge doesn’t mean the case for higher defence spending is completely without merit. | That it will is not, of course, a done deal yet. Some senior Cabinet ministers were thought to favour one simple measure that can be branded as an “NHS tax” – like Tony Blair and Gordon Brown’s national insurance hike – and covers the cost in full, leaving wriggle room for bailing out other struggling public services from the proceeds of whatever growth Brexit allows. Prisons are busting at the seams, local government’s barely coping, and just because the defence secretary Gavin Williamson sounds like a latter-day Alan Partridge doesn’t mean the case for higher defence spending is completely without merit. |
| Locked into the self-imposed straitjacket of her own manifesto, however, Theresa May is hardly spoilt for choice as to what that simple measure should be. The political fallout of breaking pledges on income and corporation tax made only last summer would be toxic, especially if that coincided with a Brexit deal falling horribly short of what leavers were promised. What’s utterly enraging, of course, is that it was so obviously irresponsible to make those promises in the first place: that pretending we can have world-class public services without paying a penny more wasn’t a lot more plausible than pretending we can leave the EU without losing any of the benefits. There’s a grim poetic justice, I suppose, in the government now being dragged kicking and squealing towards admitting that neither of those things is actually true. But don’t bank on it feeling either just or poetic to anyone on the sharp end. | Locked into the self-imposed straitjacket of her own manifesto, however, Theresa May is hardly spoilt for choice as to what that simple measure should be. The political fallout of breaking pledges on income and corporation tax made only last summer would be toxic, especially if that coincided with a Brexit deal falling horribly short of what leavers were promised. What’s utterly enraging, of course, is that it was so obviously irresponsible to make those promises in the first place: that pretending we can have world-class public services without paying a penny more wasn’t a lot more plausible than pretending we can leave the EU without losing any of the benefits. There’s a grim poetic justice, I suppose, in the government now being dragged kicking and squealing towards admitting that neither of those things is actually true. But don’t bank on it feeling either just or poetic to anyone on the sharp end. |
| • Gaby Hinsliff is a Guardian columnist | • Gaby Hinsliff is a Guardian columnist |
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