Fuel Duty (Northern Ireland)

Debate between Baroness Ritchie of Downpatrick and Lord Wharton of Yarm

Wednesday 22nd February 2012 Westminster Hall

[Ms Ritchie]

I thank the hon. Gentleman for his intervention. I agree that it is the same fuel type, which is imported directly from the middle east and wherever it is refined before it reaches the ports of Belfast and Derry. I also agree that rural communities are more deeply affected as a result of fuel duty increases. We find little reassurance in the current global situation. Just this week, Iran suspended the sale of crude oil to the UK, and the strait of Hormuz, through which 35% of all traded oil travels, is in a state of great uncertainty. It is not my intention to turn this into a debate on Iran and the middle east, but the point remains that while we rely so heavily on imported fossil fuels we will be somewhat captive to external events. Set against that, the Treasury is not doing enough to ameliorate the consequences of these events for consumers and businesses alike.

Consumers and business are caught in a pincer between the volatile price of a critical commodity and an inflexible Treasury duty regime. With the current instability in Iran, combined with the suspension of the refinery at Coryton, we would be naive to think that there will be no more inflationary pressures on the price of petrol. While the Minister has little control over an uncertain world, I would like to know what plans she has to protect people from the worst effects of those circumstances. Put more bluntly, in the short-term the Chancellor must extend the freeze on fuel duty hikes that was announced in the autumn statement. The measures announced in the autumn statement—the deferral of the 3p increase in duty and the cancellation of the escalator—were welcome short-term measures, but they will do little to mitigate the increased long-term rise in fuel prices. According to Consumer Focus back in March 2011, the 1p reduction in fuel duty was wiped out within days by rising oil prices. There is not the feeling that the Treasury is shouldering its share of the rise in the same way that motorists and businesses are.

[James Wharton (Stockton South) (Con)]

I congratulate the hon. Lady on securing this important debate. I represent a constituency in the north-east of England, which in many ways faces similar economic challenges to Northern Ireland. One issue—

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[James Wharton]

Absolutely. As the relative income is lower compared with some English regions, as it is in Northern Ireland, the effect of fuel prices is felt more acutely. Will the hon. Lady clarify whether she is looking for Government measures that are specific to Northern Ireland, or a nationally applicable measure that would benefit everybody in the UK?

[Ms Ritchie]

Naturally, I will be looking for measures that are specific to Northern Ireland because I represent a constituency in Northern Ireland. I understand the difficulties of other regions. As Mrs Main has directed, this debate is specific to Northern Ireland. If the hon. Gentleman will let me progress a little, I will explain where I am coming from.

While we rely on imported oil, fuel prices will always be vulnerable to exogenous pressures and external shocks, but the Treasury has levers at its disposal with which it could mitigate the worst of those effects for consumers. The 3p increase in fuel duty is still approaching in August and the Chancellor’s remedy would seem to be palliative rather than curative. It is a market in which price rises are passed on with alarming rapidity to the consumer, while decreases are notable mainly by their absence. It is like a seesaw with a very heavy weight at one end—a lot of jumping up and down at the other end seems to make very little difference.