In one of his more politically important announcements since becoming Shadow Chancellor, George Osborne has promised to introduce relief for motorists facing a double whammy of higher fuel duty and higher oil prices.
At the moment fuel duty automatically goes up when the price of oil goes up. Under the Conservatives' "Fair fuel stabiliser" the duty will fall when the price of oil goes up. The quid pro quo, however, would see duties rise when oil prices fell back.
Mr Osborne, making the announcement on BBC1, told Andrew Marr that if the Conservative policy was in place today motorists would be paying 5p less than they are currently paying under Labour.
A consultation paper is being launched later today which will determine exactly how the "fair fuel stabiliser" will work.
CentreRight's Andrew Lilico proposed this very idea in 2000 and again recently.
10.30am: This just in from CCHQ:
"If a Fair Fuel Stabiliser had been introduced at the 2008 Budget:
> Fuel would be 5p per litre cheaper.
> This would save up to £3.50 on each tank of fuel for a Ford Mondeo, or £2.60 for a Vauxhall Astra.
> If, instead of rising, oil prices had fallen below the $84 forecast in the Budget, then fuel duty would have risen.
> In either case forecast government revenues would have been unchanged."
As a critic of George Osborne I have just one thing to say about this...
BRAVO!
Posted by: Alan S | July 06, 2008 at 10:06
Didn't I advocate the idea of using fuel duty as a leveler on Platform last month? Not sure if these plans were already under consideration then or not?
Posted by: oberon Houston | July 06, 2008 at 10:14
Why should I pay more when oil prices fall? Not exactly market forces - sounds like Labour in the 1970s!
Posted by: Chips of Brookfield | July 06, 2008 at 10:17
Here is Oberon's article: The time for action on fuel duty was 2005.
Posted by: Editor | July 06, 2008 at 10:22
This looks politically astute and popular if dressed up as a tax cut not costing anything. Wonder how Labour will attack it.
Posted by: Andrew Woodman | July 06, 2008 at 10:30
"Wonder how Labour will attack it".
They probably won't, Andrew. They will just adopt it!
Posted by: David Belchamber | July 06, 2008 at 10:36
Still not good enough... Penalised in the (relative, it has to be said!) 'good times' and given a trivial discount in the bad. This is just a middle of the road policy.
Don't forget where petrol prices were 12 months ago. 5p is meant to make much difference? 5p is an increase I can probably absorb... 30p is not.
Why won't he do something to stop the Treasury from making up the bulk of the cost of fuel?
Posted by: The Ghost of Tony Makara's Sanity | July 06, 2008 at 11:00
A couple of points here
1) Why should motorists pay more towards education and pensions than non-motorists? Need to drive and car ownership simply doesn't correlate neatly to wealth. Some of the richest people in the UK are non-motorists because they live in Chelsea or a posh apartment in Docklands and don't need a car. The Sunderland shift worker is subsidising the Southern stockbroker's travel in a big way.
2) Beware the 'green tax' thing. If fuel duty is being used to fund things which should come from tax or NI, it isn't a green tax.
The 'green' lobby may say 'driving is bad- feel guilty and don't do it' but what is actually happening is ' Driving is bad but we need you to continue doing it and feel guilty so you cough up the tax without complaining'
I've said it before, I'll say it again 'a green tax is only a green tax if there is an alternative. Otherwise it is just a tax.'
Posted by: comstock | July 06, 2008 at 11:05
The Ghost of Tony Makara's Sanity is not an acceptable name. Future comments using that name will be deleted. Play the ball, not the man.
Posted by: Editor | July 06, 2008 at 11:11
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