Coffee House

George Osborne to Tory MPs: I hear you on fuel duty

27 February 2013

7:04 PM

27 February 2013

7:04 PM

George Osborne spent an hour in front of the 1922 this evening. 40 Tory MPs took the opportunity to promote their own Budget ideas to him. From what I understand, the tone of the meeting was cordial with Osborne in relaxed form.

A big theme was the cost of living with three MPs including Rob Halfon pushing the Chancellor on fuel duty. Osborne’s responses were non-committal but significantly he didn’t say that binning the fuel duty rise scheduled for September was unaffordable. Instead, a distinct vibe was given off that these MPs concerns would be accommodated. Two other MPs– Steve Brine and Henry Smith—made the case for a cut in air passenger duty, something that the influential chairman of the ’22 Graham Brady has been a public advocate of.


Interestingly, the chairman of the Treasury Select Committee Andrew Tyrie argued that the Budget should reduce the cost of energy by scrapping various green levies. I’m told Osborne was extremely receptive to this idea.

Join us after Osborne delivers his Budget to discuss ‘Whatever happened to the recovery?’ Andrew Neil, Fraser Nelson and James Forsyth will discuss what the 2013 Budget means for Britain’s economic future on 20 March. Click here to book tickets.

Subscribe to The Spectator today for a quality of argument not found in any other publication. Get more Spectator for less – just £12 for 12 issues.

Show comments
  • Steven

    All gas and electric company`s are rip off bas**ds, i signed up to eon because there reps said there was no standing charge now i have just found out they are charging £200 a year standing charge proffitering bast**ds

  • Daniel Maris

    Well done Fraser – you got a free 2 minute commercial for the Spectator on the Press Review on Sky tonight!

  • Andrew Paul Shakespeare

    He does this every year. I’m beginning to wonder if he only proposes to increase it so he can be seen to change in mind “after listening to the public’s concerns.” Surely it should be obvious by now that any real hike in the duty is likely to nail shut the Tories’ electoral coffin?

  • Hexhamgeezer

    What about beer duty? Those barstewards are crucifying pubs.

    • Daniel Maris

      Asbolutely. If this Government was really concerned about our culture it would be reducing (substantially) duty on beer sold in traditional pubs selling real ale.

      Sadly they are not patriots and couldn’t give a flying fig about pubs (though they could about figs probably, being all so metrosexual).

      • Tom Tom

        The only person who reduced Beer Duty was Gordon Brown who eased the rules to benefit micro-brewers

  • monty61

    So the terminally craven carves in to the terminally dim … if you were listing the things wrong with the British tax system, fuel duty would be nowhere at all, fuel prices are pretty much the same as across Europe, and have risen in large part because of currency-beggaring monetary policy cooked up between Osborne and the BofE.


    • Tom Tom

      Fuel Prices are high in every country with a Welfare State

  • paulus

    Unaffordable, If we dont cut tax on basics and consumerables there will be no recovery, there is a shortfall and it will only be met by growth, cut the tax on certain items and people will buy. We are on a road to no where, cut tax now and growth will follow. Forget what the treasury say they are drones, living in a hive, with no idea, thats why we have a seperation of powers. Its time to take control. Irrigardless of what they say.. they dont know what they are doing.

    • AnotherDaveB

      They could cut the subsidies to renewable electricity generators without costing the government a penny.

      • Daniel Maris

        They could. But whether that would be good for the national economy is another matter.

  • Daniel Maris

    George Osborne to MPs: “I’ll do anything to avoid people focussing on my p-poor management of the economy. Talking about fuel duty is one good way.”

    • Archimedes

      You’re just peeved that he’s thinking of scrapping some green levies.

      • Daniel Maris

        No, actually I don’t believe in high fuel duty. I think it’s bad for the economy – discouraging people from getting out and about and spending. It’s also unfair on people in rural areas.

        I do of course believe in investing in green energy infrastructure, but I think that should come from general taxation, and appropriate taxes (e.g. landfill tax, Stamp Duty tax) .

  • Russell

    I am surprised that energy company CEO’s and water company CEO’s can say they need to increase prices and get higher profits because they have to invest in infrastructure (new pipes/lines etc), and nobody questions them.
    Shouldn’t the owners of businesses like these (the shareholders) make the investments necessary to get a return in the future, not the customer?
    Businesses used to invest their own money when they needed to expand or modernise, or borrow from banks. If they simply hiked up their prices, competition would drive them out of business.
    These large companies, including Rail companies are fleecing consumers as when they invrease fares or services, the shareholders benefit with dividends and the executives get huge salaries and bonuses.
    Things need to change.

    • Count Dooku

      The think these utilities have in common is that they are heavily regulated and face zero competitive pressure when it comes to pricing (govt “supervises” them) and are usually heavily taxed.
      Other utilities with much lower regulatory pressures such as mobile companies, broadband, satellite tv and even BANKING have been passing on lower pricing in real terms to consumers for years as their costs have fallen with technology.
      Whenever you’re being ripped off, look deeper and you’ll see the dead hand of Whitehall behind it.

      • Tom Tom

        Not sure how they are “heavily” regulated. they are less regulated than in the USA or Germany or France. They play games with their wholesale costs and rig the market so noone knows how profitable a British Gas or EDF really are with fully integrated operations. As for National Grid, why am I paying for new transmission lines to windmills ? Why do I pay for free insulation for some households ? Why do I pay for solar energy at 4 times the cost of normal generation ?

        • Count Dooku

          Germany has higher energy costs than the UK and is killing its heavy industry because of it, France has over 60% of its energy from nuclear and it’s growing (relatively low and stable prices) and the US utility companies are very localised and energy is taxed at a sensible and low rate (not to mention their vast energy reserves). None of these countries are comparable to the UK.

          Due to govt policy we have the worst of all worlds. State sponsored private monopolies that are subsidised with one hand (the customers pay) and are taxed on the other (the customers pay again).

          I’d like to know the answer to the rest of your questions as well.

          • Daniel Maris

            Count Dooku – Do some research. New nuclear – the only game in town for nuclear – is much more expensive than even coal or onshore wind.

            • Count Dooku

              Of course it’s more expensive! Initially.

              It’s the same way a bulldozer is more expensive that a guy with a shovel. Once you’ve sunk the capital you have safe, cheap and steady electricity. Not to mention it has zero greenhouse emissions and is not dependent on Chinese rare earth metals and killing hundreds of millions of birds.

              • Daniel Maris

                No – do the research – you’ll find that the levelised costs over 20-25 years are not low. Nuclear is the expensive option. If you don’t care about the environment, just go for gas. It’s far, far cheaper than nuclear.

                • Tom Tom

                  “Go for gas”….and where do we find gas ? Do we seize Qatar or simply burn coal to produce gas ? I am unclear how we obtain gas and have stable prices and security of supply. Some idiot in the 1980s piped N Sea Gas into electricity generation so our Heating and Lighting useed the same fuel source depleting N Sea Oil much faster

                • itdoesntaddup


                • Returned Stereo Type

                  The BIGGEST benefit of going Nuclear is that we have OUR OWN supply. That has to be in the BEST interests for the FUTURE. Unless Shale gas lifts off we should consider Nuclear only. And also stop the blag that wind turbines do anything except kill birds and bats

          • Tom Tom

            Germany has higher energy costs because it has 19% VAT on energy and it burns lignite. The Energy Minister has just stated the cost of shuitting down nuclear and going renewables will be 1 Trillion Euros which will bankrupt Germany. E.On and RWE are suing the German Government for the about-turn on nuclear energy and the costs imposed. Germany has destabilised the electricity grid in Poland and Czech Republic by its routing North to South from windmills so now is being blocked off from access. The costs in Germany are simply because Germany went mad on subsidising Solar and Windmills. Britain decided any competitive advantage it might have with coal and North Sea Oil would be best squandered by selling N Sea Gas cheap to Belgium and buying it expensively from Norway and Qatar……..

            • Count Dooku

              You seem to have a habit of violently agreeing with me…

              • Tom Tom

                You should count yourself lucky

        • Daniel Maris

          I agree that putting a green energy infrastructure through effective levies on energy bills is not a good approach. It would be much better if the funding came primarily from Stamp Duty and general taxation. Not really much different from funding for the original motorway system.

    • Koakona

      I generally want industry to be run by the private rather than the public sector but energy and water are two examples of being better off public. The required investment and sensitivity to government policy (not to mention we do not consider these consumable or brand goods and services but rather a fundamental right) ensures that the market cannot function properly due to constant intervention and regulation.

    • Tom Tom

      Utilities are supposed to have stable cashflow which means they can issue Bonds for investment. The Regulatory system in the UK was made deliberately weak to make Utilities super-profitable and make re-nationalisation too costly.

    • HookesLaw

      where do you think Companies any company gets its Money from?
      The bucket at the end of the rainbow?
      It comes from the customer

      • Russell

        Exactly what is wrong with these companies who share your twisted view that customers should pay for investments in companies so that those companies can continue to make profits and pay their CEO’s obscene salaries/pensions/bonuses.
        Company shareholders should pay for investment, or investors, who would get a return on their investment, not customers.

  • Bob339

    George asked me to remind everyone to go here and sign:

    To chuck the fat cats off the gravy train.