Paul Abbott is Chief Executive of Conservative Way Forward and a former CCHQ staffer.
Owen Meredith is a comrade of mine: we are fellow members of the Vauxhall Conservatives, and we had a cheerful pint together recently. He has spent many years fighting splendidly for our Party in Wales, London, and elsewhere. So, I owe him good words and it’s a bit rotten of me to write a quarrelsome article like this. He is a pal. But he is utterly, utterly, utterly wrong about fuel duty. Owen wants to see it hiked by a gargantuan sum (50 per cent!) to fund lower payroll taxes next week. I agree with his goal of helping people on lower incomes, but hiking fuel duty would be a self-defeating ordinance, and whether or not you agree that his proposal is sound economically (I don’t), the politics of it are terrible.
Let me explain. First of all, Lynton Crosby’s famous “long-term economic plan” was not just a random phrase. It was a real plan that we published on millions of leaflets and letters from the Prime Minister, which as a Party we then collectively pushed through millions of letterboxes over 18 months. Millions of voters were told – repeatedly, explicitly – that the Conservatives were working to a long-term economic plan; that this plan involved freezing fuel duty; and that the consequences of this for them would be a stronger economy and a better life.
The long-term economic plan – or the “LTEP”, as it was lovingly nicknamed by one wag in the Conservative Research Department – is spelled out in glorious and proud detail on the Party’s official website. If you walk into CCHQ you can still see the five key points printed in huge lettering on the walls. The “long-term economic plan” may have been a famous catchphrase, but it had genuine substance. And, of course, point two of our long-term economic plan was, and still is, “freezing fuel duty”. Or, to quote the full shebang: “cutting income tax and freezing fuel duty to help hardworking people be more financially secure.”
Here is a screen-grab, as it appears today on Conservatives.com:
The political point is this: we cannot run a General Election campaign on an explicit commitment to freeze fuel duty, and then bring in a massive 50 per cent hike in this same tax just a few weeks later. This would be pure hypocrisy. It would make a mockery of the political process. Such a U-turn would be as damaging to us, potentially, as that fatal U-turn was on tuition fees for Nick Clegg and the Liberal Democrats.
Furthermore, there is a strong social justice argument for freezing fuel duty, which Robert Halfon, the Party’s new Deputy Chairman, has championed forcefully and with great energy over many years. The Office of National Statistics published a major study in 2011 which showed that fuel duty is a shockingly regressive tax. It hurts the poorest in our society the most, swallowing up twice as much of their income as the richest. Hiking fuel duty by 50 per cent, as Owen recommends, would crush the disposable incomes of Britain’s poorest people – the people who we should most be fighting for, who are working to build a better life for themselves. I believe that making it costlier for them to drive to work would be a profound mistake – no matter how we tried to redistribute the money to help them in other ways.
Whether we like it or not, Britain is still a car-powered economy. 70 per cent of us still drive to work, according to the AA. Driving is not a luxury: it is not a foreign holiday or an expensive handbag. Driving for most people is a necessity – whether visiting elderly relatives in hospital, or collecting children from school, or buying groceries from the supermarket.
Fuel duty will probably always be with us: but it is a tax on almost every part of our lives. It is a toxic, hated tax, which is regressive and hurts the poor – and we are reminded of its burden every time that we fill up our family car. The politics of it whacking fuel duty up by 50 per cent – after promising so loudly not to – are impossible to contemplate. I admire Owen for stirring up the debate: but we raise fuel duty at our peril.