GWPF Newsletter - Boris Beware: Tory MPs Threaten To Rebel If Fuel Duty Is Raised In The Budget

Boris Johnson Risks Betraying The Very Voters Who Trusted The Conservatives

In this newsletter:

1) Boris Beware: Tory MPs Threaten To Rebel If Fuel Duty Is Raised In The Budget, Warning It Would Hurt Northern Voters
Daily Mail, 21 February 2020

2) Meddling in Domestic Heating is Foolish: Increasing Fuel Duty is a Blunder
Global Warming Policy Forum, 21 February 2020

 
3) Quentin Willson: Boris Johnson Risks Betraying The Very Voters Who Trusted The Conservatives
The Sun, 21 February 2020
 
4) EU Gripped By Budget Chaos After Brexit: Four Key Nations Refuse To Pay For One Trillion Euro Plan To Fight Climate Change
Daily Mail, 21 February 2020

Full details:

1) Boris Beware: Tory MPs Threaten To Rebel If Fuel Duty Is Raised In The Budget, Warning It Would Hurt Northern Voters
Daily Mail, 21 February 2020
 
Tory MPs have vowed to battle any move to increase fuel duty for 37 million hard-pressed motorists in next month’s Budget.

Reports suggested new Chancellor Rishi Sunak might contemplate a 2p per litre rise in line with inflation, the first increase in a decade. 

The move, said to have originated with No 10 chief aide Dominic Cummings, who wants £4billion to fund planned infrastructure projects.
 
But the suggestion – downplayed by the Treasury  – prompted a warning that it could cost the Tories in former Labour seats it won for the first time at December’s election, especially in the North and Midlands.
 
‘This would hit people, particularly in rural communities, outside towns and cities and in many parts of the country where we won seats for the first time in the election,’ Filton & Bradley Stoke MP Jack Lopresti told the Times.
 
‘We all believe that we need to put significant investment in public transport infrastructure but until that happens we should not be considering raising duty.’
 
The move is said to be being explored at the behest of Mr Johnson’s powerful chief aide Dominic Cummings
Freezing the duty instead of increasing it in line with inflation saves drivers around £1.50 every time they fill up.
 
But it also costs the Treasury billions in lost revenue and is also seen by some environmental campaigners as subsidising people responsible for damaging the planet.
In a pre-election speech on December 4 Mr Johnson announced that a fuel duty freeze which would financially benefit 37million motorists would be in the first post-Brexit budget.
 
But the plans is said to be one of the areas where he clashed with ex-chancellor Sajid Javid, who wanted to keep it in place, while Mr Johnson was happy to see it removed. 
 
A Government source suggested an increase was unlikely to be in the March 11 Budget.

But campaigners fear that it could be introduced in 2021. 
 
Full story

2) Meddling in Domestic Heating is Foolish: Increasing Fuel Duty is a Blunder
Global Warming Policy Forum, 21 February 2020
Dr John Constable, GWPF Energy Editor
 
A brave Chancellor would cut transport fuel duty and look to raise revenue from future economic growth. If the new Chancellor increases fuel duty, instead, economic activity will be correspondingly inhibited.
 
In the last few days the British government has announced that it will be moving to ban the use of unprocessed coal and wood for domestic fires. Foolish and counterproductive though this policy almost certainly is, it should not be allowed to distract attention from the even greater error of rumoured proposals to increase Transport Fuel Duty, an increase which would put the brakes on the economic revival required as the UK leaves the EU.
 
Today’s headlines (21 February 2020) in the UK are being dominated by news that the government is intending to outlaw in England the sale of unprocessed coal, and also wood that has not been industrially dried to reduce moisture content to less than 20%.

While it is possible to air dry wood to these levels in the summer, when average humidity tends to be lower, this will be difficult to sustain in winter, when the fuel is actually needed. In practice, no legitimate vendor would take the risk of relying on the air-drying of wood. In essence, therefore, government is insisting on the use of manufactured fuels, fossil fuels treated and reconstituted as briquettes and also on industrially dried wood. Such fuels are of course much more expensive than their unprocessed feedstocks, and while locally clean may actually have higher total greenhouse gas emissions due to the processing involved. – The Kiln drying of wood uses a considerable amount of energy.

For most households affected it will be the cost that concerns them most. Manufactured solid fuels are are upwards of 20% more expensive than coal, a significant problem anyone still using coal and now faced with the prospect of switching to briquettes. This increase might even be nationally significant. Those households still burning coal in the Britain consumed about 555,000 tonnes a year in 2018, down from about 20 million tonnes a year in 1970 (see Table 2.12 in DUKES 2019). This compares to current domestic consumption of manufactured fuels of about 240,000 tonnes a year (See Table 2.5). Thus, if all current coal-using households switch to manufactured fuels this will effectively treble their market, and considerably increase national expenditure on manufactured fuels.

The situation for wood burning households is perhaps still trickier. Many rural houseowners, off the natural gas grid, burn so called “wet wood”, in other words timber felled locally and air-dried in sheds, in order to economise oil or Liquid Petroleum Gas (LPG). For much of the time the central heating, if any, will be turned off or the thermostat set very low, while a log fire or woodburner will keep at least one living room warm.

Kiln dried wood is approximately £150 per cubic metre, which is roughly double the cost of comparable air dried wood. Indeed, this cost is a byword for extravagance. Given the expense, it is unlikely that many householders will make the transition to kiln dried wood, except for aesthetic considerations on an occasional basis. For everyday purposes, wood burning households will now be compelled to consider using more oil or LPG, turning to the manufactured solid fossil fuels that are still for the time being permitted, or resorting to electricity.

But thanks to the government’s renewables policies, electricity is strikingly expensive, being somewhere between 30 and 40 percent more expensive per kWh than it would be in the absence of policies (see the UK government’s last published estimates. This price premium is bad enough for households that don’t use electric heating, putting about £125 a year on the bill, but electrically heated households, of which there are about 2 million, typically consume two to three times as much electricity as other households, and are obviously much more severely affected.

Consequently, and because of climate change policies, electrical heating is not an attractive option. It seems likely, therefore, that rural households that have hitherto used air dried wood to economise oil and LPG will either give up and burn more fossil fuels, or go without heat, or resort to the inevitable black market for air dried wood. None of these outcomes is obviously desirable.

In fairness to Mr Johnson’s government it must be noted that this heavy handed policy was being cooked up within the notoriously insouciant Department of Environment (DEFRA) long before he became Prime Minister. Indeed, the consultation was  open from August to October 2018. This is one of Mrs May’s legacy policies. But the inevitable question is, then, why has this new government persisted with something that is not of their making, is only speciously beneficial, was certain to generate a great deal of bad press, and will almost certainly be counterproductive?

The answer to this, not a reassuring one, is that Mr Johnson’s administration has yet to fully grapple with the threats posed by the maladaptive energy policy more and more deeply entrenched by every administration from Blair to May.

Proof of this depressing conclusion can be found in the plausible rumours that the new Chancellor, Mr Rishi Sunak, is considering increasing Transport Fuel Duty for the first time in a decade.

Transport Fuel Duty increases the cost of gasoline and diesel to consumers by some £28 billion a year, and is already one of the largest fiscal brakes on economic activity in the UK. If anything, tax on petrol and diesel should be reduced not increased, since the cost of transport fuel is, in a sense very close to being literal, the throttle of economic activity, and though it has some competition, high fuel duty is probably one of the single most significant factors in sluggish British economic performance over the long term.

Transportation costs are significant fraction of practically every imaginable good and service. If a Chancellor increases fuel duty, economic activity will be correspondingly inhibited. Even a small cut in fuel duty, on the other hand, causes costs to fall throughout the economy with the result that people are able to do more for each other and for themselves, while a major reduction in Fuel Duty would give the UK a large advantage as compared to countries unwise enough to use this as a cash cow.

However, this government badly needs revenue, and it may feel that it can safely increase Fuel Duty without provoking gilet jaunes riots. That might be correct. On the whole, societies will tolerate impositions if they are evenly spread across the population, which fuel duty largely is (rural populations aside).
 
Being competitive organisms we care much less about absolute than relative well -being. If the tax applies to everyone it will be accepted as “fair”. Thus, a Transport Fuel Duty increase will probably have broad domestic political viability, and any resistance can be policed. It is, after all, being policed in France.

But that doesn’t mean it is a sensible fiscal move. Given the external pressures on the United Kingdom as it secedes from the EU it would be a serious blunder to increase fuel duty and inhibit deep, distributed and sustainable growth, “Levelling Up”, as the Prime Minister has called it, at a time when the country is facing grave external threats and so needs economic and societal vigour, as well as cohesion, more than ever. A brave Chancellor would cut transport fuel duty and look to raise revenue from future economic growth. 
 
Dr John Constable, GWPF Energy Editor.
 
3) Quentin Willson: Boris Johnson Risks Betraying The Very Voters Who Trusted The Conservatives
The Sun, 21 February 2020
 
So to No  10’s Policy Unit and the Treasury, I say: Be careful what you wish for.

FOR ten years Britain’s already put-upon motorists have been spared any rise in fuel tax.

But that could be coming to an end with rumours that Boris Johnson’s hyperactive chief adviser Dominic ­Cummings is planning to add an extra 2p in duty on a litre of petrol.

If the Prime Minister is in any doubt about what the nation feels about this, I can tell him that campaign group FairFuelUK have received more than 100,000 angry emails from supporters ­condemning the proposed rise.

They feel that their trust has been broken, their hopes dashed and their financial future left uncertain. They also tell us that they will never vote for the Conservatives again if this rise goes through.

And for some, especially those in the so-called “Red Wall” former Labour heartlands, it may have been the first time they ever did.

So to No  10’s Policy Unit and the Treasury, I say: Be careful what you wish for.

Walking on the hopes and dreams of so many in this country will cost the Government the precious virtues of faith, trust and integrity.

And to the PM I say this: When you were London Mayor, you and I stood by many electric car-charging   points, backing zero-emission cars.

You know I’ve passionately promoted electric vehicles over the past decade and am lucky enough to drive one every day.

But you also know that your Government has not built a 21st Century charging infrastructure to help reduce range anxiety.

Britain already has the highest fuel taxes in the world.

A duty rise is the last thing we need when falls in world oil prices are barely passed on to the consumer.

In October 2018, oil companies held back nearly £500million of price decreases.

Yet now you’re planning to hike   fuel duty to reduce car and van use and lower emissions when you haven’t provided 40million drivers with an alternative.

Ask former Labour voters in the Midlands and the North how many car chargers are conveniently close to their homes and they’ll count them on the fingers of one hand.

I’m writing this in Warwickshire, where there are just five public chargers nearby and currently four of them are blocked by other cars and one is broken.

You just can’t use higher fuel duty as a blunt fiscal instrument to appease London environmentalists when you are not offering the rest of the country a viable electrified choice.

I’ve spent the past decade stalking the corridors of the Commons begging politicians and ministers to keep fuel duty down.

I’ve done this along with Howard Cox, founder of FairFuelUK, with massive support from The Sun and its long-running Keep It Down campaign, because it is simply the right thing to do.

Together we have put £100billion back into our fragile economy and kept the cost of living down.

Over those ten years, 170 cross-party MPs, two million drivers, three Prime Ministers and two Chancellors have supported us, agreeing that low fuel duty helps keep inflation and interest rates down, stimulates economic activity and puts money back into people’s pockets.

The Treasury has said that “the beneficial economic effects of the fuel duty freeze will be felt for decades to come” and the Centre for Economics and Business Research has estimated that UK household expenditure has boosted to the tune of £24.2billion due to fuel duty being frozen.

So, given this wall of economic proof and wise political support, why are we now hearing that the Government will raise fuel duty in the next Budget?

POLITICAL IDEOLOGY

Because Westminster is no longer listening to the 40million drivers who have no other choice than to use their cars and vans. That’s why.

Decent, hard-working people, pensioners and businesses up and down the country who rely on their vehicles to survive. If that sounds dramatic, it’s not.

The Red Wall that the Prime Minister was so keen to cherish in the election represent exactly the people who cannot afford electric cars, who dread every brown envelope that tumbles through the letterbox and struggle every month to make ends meet.

These are the voters who will hurt most when the price of fuel goes up and who make up a huge slice of the electorate.

Westminster is becoming dangerously famous for its contempt for ordinary people, living as it does in the London cocoon with its connected public transport system. The political elite in Islington may not need cars or vans but ask voters in Yorkshire, the West Midlands, Nottinghamshire, Derbyshire or Cumbria if they have a public transport system they can use successfully, and they’ll laugh out loud.

To burden these families and businesses with a higher cost of living because Westminster has decided a fuel duty rise fits into their latest political ideology is contemptible.

And it’s an ideology that will have unintended consequences. Everything we buy in the shops is transported by road, so everything will be more expensive.

Costs to business will increase, factory gate prices will soar, disposable income will reduce and inflation will rise. And if that’s not dire enough, those voters who trusted the Conservatives to manage the economy will feel betrayed and cheated.
 
4) EU Gripped By Budget Chaos After Brexit: Four Key Nations Refuse To Pay For One Trillion Euro Plan To Fight Climate Change
Daily Mail, 21 February 2020

EU leaders were facing budget chaos today at a bruising first summit since Brexit as four wealthy nations refused to fill the gap left by Britain's departure.



The 27 leaders reached a stalemate after arguing into the early hours in Brussels, with talks on the trillion-euro budget resuming for a second day today. 

The UK's departure has left the bloc with a €75billion (£63billion) hole in its finances and the budget battle has exposed bitter divisions between EU members. 

Germany wants to spend more on climate change while France is seeking more money for a joint defence, with poorer nations determined to keep their generous EU payouts. 

But the so-called 'frugal four' of Austria, the Netherlands, Denmark and Sweden are unwilling to pay more to plug the gap. 

Dutch prime minister Mark Rutte, who came prepared for a long-haul summit by carrying a biography of Frederic Chopin, said he did 'not plan to put my signature' to the latest compromise proposal. 

The 27-member bloc's unity during Brexit negotiations has given way to fractious talks on its future after Britain finally left on January 31. 

A frustrated Czech prime minister Andrej Babis said there was 'no point continuing the summit' if the 'Frugal Four' refused to increase their contributions. 

'If the group of four rich countries Sweden, Denmark, the Netherlands and Austria insist, we can go straight home,' Babis said today. 

The Frugal Four are unwilling to pay more to fill the Brexit gap, while Germany is also wary of a spiralling budget. 

Full story

The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.