Fuel Costs

Robert Halfon Excerpts

Monday 7th February 2011 Commons Chamber

[Stewart Hosie]

I believe that the SNP opposed a number of the fuel duty increases. The hon. Gentleman may have been an honourable exception—I hope he was—but my memory tells me that Tory FrontBenchers abstained on some of those increases over the past few years when they were in opposition. He is generally right, but as I said, the debate is not about the cancellation or postponement of a single increase, however welcome that is, but about the implementation of a permanent stabilisation mechanism. Mr Willox said of that debate that:

“The FSB is right behind all moves to introduce a fuel duty stabiliser.”

[Robert Halfon (Harlow) (Con)]

I thank the hon. Gentleman for giving way on this very important subject. The Government pay around £7,000 per head per taxpayer in England, and yet they pay £8,500 for every Scottish taxpayer. Does he agree that if that subsidy were reduced, we would have more money across the country to cut fuel duty?

[Stewart Hosie]

I am always surprised when otherwise articulate, able and intelligent Members do not see the whole picture. When one looks at total tax and total income, rather than the mere, modest fragment of net identifiable expenditure, one sees a rather different story. Prior to the recession—independent figures stand this up—Scotland was about £50 billion in, £50 billion out. As the hon. Gentleman will recall, the UK ran a £0.5 trillion debt before the recession, so his argument is not particularly helpful, and nor does it really pertain to today’s motion.

Of course, some business sectors are hit rather harder than others. Some businesses have a little leeway in their pricing policy, but some have none. I was struck by the comments of Bill McIntosh, the general secretary of the Scottish Taxi Federation, who said:

“Taxi drivers”—

it is an important trade—

“are affected more than most by increases in fuel. Unlike other transport operators, taxi drivers can’t just raise their prices as fares are set by local authorities…The Scottish Taxi Federation welcomes and supports the proposal for a fuel stabiliser.”

That is important. The sector has a fixed pricing structure that it cannot adjust and rising input costs.

Many haulage firms—this is an extreme example—have already agreed long-term future contracts with a fixed price. There might be some variation, depending on the uplift in fuel, but it is unlikely, under the contractual arrangements, that they could be compensated for the very quickly and steeply rising input prices. In my view, the haulage sector suffers the largest single impact. According to the Road Haulage Association, operating costs have risen by 3.3% since last October. It tells me that fuel accounts for more than a third of the sector’s business costs, and that, in cash terms, an average rise is expected this year of £4,206 on the basis of increases over the past three months alone. That is quite extraordinary—an increase of £4,206 in the running costs per truck.

I suspect that that is why Phil Flanders, the Scottish and Northern Ireland director of the RHA, has said:

“The RHA…supports the SNP/Plaid Cymru motion to urge the Government to take immediate action to resolve the increasingly difficult situation that hauliers—and motorists—find themselves in due to the cost of fuel.”

He went on to say that it has always supported these

“proposals for a fuel duty regulator in order to bring stability to the costs of a haulage business where fuel”

in some places

“can account for around 40% of running costs…Whatever it is called—a stabiliser or a regulator”—

or a modulator—

“help is urgently needed for all hauliers and particularly those further from their market such as those in Scotland, Wales and Northern Ireland. Remote rural communities also deserve special help given the exorbitant price they have to pay.”

I will say more about that later. He continued:

“It cannot be stressed strongly enough that in the past year fuel prices have gone up by at least 14% and in the last 28 months there have been 8 fuel duty hikes amounting to a 25% increase. This is just simply unacceptable for the economy.”

I share that view entirely.

The Freight Transport Association has followed up that support and welcomes the effort

“to develop the fuel duty debate further. Lives and livelihoods up and down the country are suffering in the face of unsustainable and crippling fuel costs. For businesses still in the grip of tough trading conditions these costs severely restrict cash flow and a company’s ability to do business; sadly this can translate to job losses and the difference between solvency and insolvency.”

It says that when the price of fuel

“rises steeply it has an immediate impact on a company’s cash flow.”

Given how the banks are behaving, with credit tight and squeezed, cash flow is vital.

The FTA also says:

“As part of the Fair Fuel UK Campaign, the Freight Transport Association and the Road Haulage Association, along with backing from the RAC, are asking government principally to scrap the fuel duty rise planned in April and introduce a methodology for stabilising fuel prices.”

Indeed, Fair Fuel UK, which is supported by 20,000 road freight companies, the Royal Automobile Club, dozens of trade associations, other groups and tens of thousands of individual motorists, has said that it supports today’s attempt to raise this issue and its impact on the economy on the Floor of the House. It said that this

motion and debate will…add pressure to the Government to act”,

and act quickly, on what it calls a “fuel crisis”. There is no doubt that this is a crisis. It is also clear that there is not only an assessment of a real, immediate and serious problem, but a clear coalescing of those at the front line about the introduction of a stabiliser as the primary solution.

This is about not simply a fuel duty regulator or stabiliser, however, but the specific problems in remote areas.

--- Later in debate ---

[Justine Greening]

Obviously it will not be a short process involving a few weeks, but I think that the hon. Gentleman and his party know from their experience of the process involved in calling for the derogation that the route that we are taking can provide real support for motorists in rural areas.

[Robert Halfon]

rose—

[John Thurso]

rose—

--- Later in debate ---

[Justine Greening]

I agree with my hon. Friend. I too remember his party, before it joined the coalition Government, making the case for a rural fuel rebate.

I now give way to my hon. Friend the Member for Harlow (Robert Halfon), who tried to intervene earlier.

[Robert Halfon]

I welcome the debate, because hard-pressed constituents of mine, especially small businesses and families, are suffering hugely as a result of high fuel costs. May I make a special plea? National health service workers in my constituency who have to use their cars to visit patients receive tiny fuel allowances—in some cases, only 12p per mile—which remain the same regardless of the price of fuel. Will my hon. Friend consider changing the guidelines so that NHS workers need not suffer in that way?

[Justine Greening]

I shall ensure that I respond to my hon. Friend on that issue. A variety of concerns about the cost of motoring have been expressed in constituencies throughout the country in recent years.

I hope I can reassure Opposition Members that we are getting on with the process of requesting a derogation by trying to arrange some pilot schemes. I am sure they will be pleased to learn that, although we are still considering the exact scope of the pilots, we have announced our intention of including the Inner and Outer Hebrides, the Northern Isles and the Isles of Scilly, should we be given the necessary dispensation. I assure Members that we are pressing ahead as fast as we can, and we should appreciate their support in helping us to complete the process. I hope that they will be able to overcome any political barriers, do the right thing and back up the coalition Government as we go through this process over the coming months.

We recognise the importance of fuel prices to motorists and businesses. While we are looking at options in the run-up to the Budget, which I will discuss this afternoon, we can have one of two debates today: we can continue to argue about the problem and waste the opportunity presented by today’s debate by scoring points, or we can have a frank and open debate about how to reach the best solution and how we can find common ground. For instance, do we agree that the price of fuel and the affordability of motoring are important for motorists? The answer is yes. Do we agree that the unpredictable way in which the oil price fluctuates can create difficulties for households and businesses when it comes to budgeting? The answer is yes, although the Labour party never recognised that point in government, and I doubt whether it recognises that point in opposition—if it does, perhaps the hon. Member for Bristol East (Kerry McCarthy) will explain why it has suddenly changed its mind after having been booted out by the electorate.

Comprehensive Spending Review

Robert Halfon Excerpts

Wednesday 20th October 2010 Commons Chamber

[Mr Osborne]

First, we have preserved the Barnett funding arrangements. Secondly, the decisions that we have taken on the national health service and schools budgets in England will help the funding settlement for Scotland. What we are seeking to do, north and south of the border, is to put the United Kingdom’s economy on a strong and sustainable footing so that there can be growth in Scotland and in the rest of the country. My final observation is that people are pretty clear, in the House and in Scotland, that if Scotland had been independent over the past three years, given the scale of the banking crisis, it would now look like Iceland.

[Robert Halfon (Harlow) (Con)]

My constituents will welcome this Robin Hood public spending statement, particularly the resources that are going into cold weather payments, apprenticeships and help for young children. Does the Chancellor agree that people would rather have lower taxes and more spending on public services than spend £120 million a day paying off the debt?

[Mr Osborne]

My hon. Friend is right. This country is spending £120 million a day on debt interest. So all the pet projects that Labour has suddenly discovered—[Interruption.] Well, the truth is that the previous Labour Government inherited a golden economic legacy from the Conservatives, but we have been left the worst economic inheritance that any peacetime Government in this country have ever faced. Unfortunately, we have to deal with it, but we are doing that as two parties working together to clean up the mess that one party created. The goal that I have in sight is a more prosperous, sustainable economy and a public finance situation that is deliverable and affordable for the people of Harlow.

Draft EU Budget 2011

Robert Halfon Excerpts

Wednesday 13th October 2010 Commons Chamber

[Kerry McCarthy]

I am here to put the questions to the Minister and to find out what her stance is. She is trying to placate Conservative Back Benchers, who are clearly unhappy about the lack of progress being made by the Government. It is tough talk, but it is all talk and there is no action. When she goes to Brussels tomorrow, what will she see as success in those negotiations? What is she aiming for?

[Robert Halfon (Harlow) (Con)]

Does the hon. Lady’s party support a cash cut in the EU budget?

[Kerry McCarthy]

Again, we are not here to answer questions. We are here to put the questions and to get—[Interruption.] The Minister should accept that the Conservatives are now in government. She cannot just do what she did in opposition and talk tough—

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[Mr Cash]

The budget is part and parcel of the issue of parliamentary sovereignty, which I shall come on to in a moment. If we are to act properly and responsibly in our own Parliament, we shall have to deal with this Parliament’s relationship with the EU as a whole. If we get that right, we can proceed in an orderly manner to the questions that we must ask in the political environment that we now experience. That will ensure that we are not subject to further increases in European functions or to the assertions of the European Court and other European institutions on the sovereignty of this House.

[Robert Halfon]

Although I accept what my hon. Friend says, does he not agree that by the time all that has been done, the budget increase will have gone through?

[Mr Cash]

With great respect to my hon. Friend, with whom I have had many useful discussions on this matter over the years, I do not agree for the reason that I have already given. It all depends on whether, as a result of the forthcoming negotiations, we achieve a blocking minority in the vote on the conciliation agreement. That agreement has not yet been mentioned, but regrettably it is integral to the procedures that we now face.

I fear that there might be a slight misunderstanding, because I suspect that all Members on the Government side of the House—or even all those in the Chamber—and many people in the Conservative party and the country at large, would agree with both amendments. The distinction I am drawing between them is simply that in the real world we must address such matters in a certain fashion. I do not want to advance my amendment simply because it is mine. It will not do any good if we go too far in merely expressing a sentiment with which everyone agrees, if the consequence of doing so is a counter-productive result. That is why I am taking the position outlined in amendment (a). I urge my hon. Friends—not for my sake, but simply for the sake of ensuring that we get things right—to support it.

--- Later in debate ---

[Andrew Percy]

I could not agree more with my hon. Friend. As I said earlier, what we heard from the Economic Secretary to the Treasury today was incredibly refreshing, and I am heartened that she is going to fly off to Brussels tomorrow and bang the table on behalf of British taxpayers. The British people expect someone to stand up for them in Europe, and I have no doubt that the Economic Secretary will do so.

[Robert Halfon]

My hon. Friend is making an excellent speech. Does he agree that this should be a question not of freezing the amount of money that we give to the European Union, but of reducing it substantially? If we are cutting departmental budgets here rather than freezing them, we should also be reducing the EU budget. That is what taxpayers want.

[Andrew Percy]

My hon. Friend hits the nail on the head. It has come to a strange pass when I have to explain to my constituents why a number of their play parks, costing some £5,000 to £10,000 each, can no longer be afforded because we have run out of money—as we know we have, because Labour has admitted it—only to have to tell them that we need to find £435 million more to send to projects overseas. I fully accept that some of that money will come back here, but a large chunk of it will not. We would not expect our constituents to invest in a bank that offered that kind of a deal.

I support the strong stance that the Economic Secretary set out earlier, and I hope that there will be significant movement on this issue in the coming months and years. However, we are being asked tonight whether we are prepared to ask our constituents, at a time when we are making massive cuts and asking them to make savings, to foot the bill for much more money for Europe. That is not something that I am prepared to do to the voters of Brigg and Goole.

Oral Answers to Questions

Robert Halfon Excerpts

Tuesday 12th October 2010 Commons Chamber

[Mr Osborne]

We are having to take decisions to close the highest budget deficit in the G20. I listened to what the previous Chancellor of the Exchequer said recently on “The Andrew Marr Show”. He was asked:

“we now read from Peter Mandelson’s book that you were quite keen on the idea of VAT going up”.

Alistair Darling replied:

“Well yeah, obviously…It would have allowed you to have done you know a lot more to take down the deficit…and would have…ameliorated some of the worst effects of reductions”.

For once, the previous Chancellor of the Exchequer had the right idea—[Interruption.] That is because he was overruled by the then Prime Minister.

[Robert Halfon (Harlow) (Con)]

May I bring to the Minister’s attention the case of my constituent, Mr Peter Gorse? Mr Gorse ran a healthy small business until the Royal Bank of Scotland forced him into bankruptcy so that it could repossess his assets. Will the Minister agree to meet me and my constituent so that his case can be heard fairly by that taxpayer-owned bank and to ensure that cases such as his are fairly considered as we reform the banking system?

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The responsibility for operational matters at RBS rests with its board. The Treasury’s engagement with RBS is through United Kingdom Financial Investments Ltd, which acts as a shareholder. My hon. Friend will be aware that in July we published a Green Paper setting out some approaches to improving the access that small and other businesses have to finance, and we will make further announcements on that shortly.

Budget Resolutions and Economic Situation

Robert Halfon Excerpts

Thursday 24th June 2010 Commons Chamber

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I welcome you to your seat, Mr Deputy Speaker. I also congratulate the hon. Member for Camborne and Redruth (George Eustice) on his excellent maiden speech, and my hon. Friend the Member for Kingston upon Hull East (Karl Turner) on his.

Many of my hon. Friends have already raised their objections to the Budget. I share all those objections. As was pointed out by my hon. Friend the Member for Telford (David Wright), the Budget attempted to rewrite history, completely ignoring the world economic crisis. This is the first Budget of the 21st century that hits those who are worst off the hardest. Contrary to what was said by the hon. Member for Ealing Central and Acton (Angie Bray), who used the phrase “needs must”, the Tories told us throughout the election campaign that there would be no cuts in front-line services. There is no possibility of cuts of more than 25% in Government Departments without front-line services taking a hit.

I want to focus on two very different elements of the Budget which will have a negative impact on my constituency. The first is the appalling news that the Sure Start maternity grant is to be restricted to the first child. That raises a number of obvious problems, not least the moral hazard of cutting benefits for low-income families and their newborn babies when they need help most.

It seems obvious that, in the interests of all of us, children from low-income families should be supported as much as possible. The proposal in the Budget is less than clear. Will the restriction of the grant to a first child mean that those who did not take the benefit when they had their first child and are now having their second cannot receive it, even if they need it? That seems particularly likely to happen in a number of instances, especially following the recession. Moreover, the Budget seems to make no provision for a number of “blended” families. What of the mother with her first child who is the father’s third? Will that family be eligible for the grant? What of families in which a child is born while an older baby is still using the necessary equipment, and what of twins?

The Government will undoubtedly attempt to justify the cut by saying that the grant is intended to buy permanent equipment such as prams, cots and sterilisers, items that will last and can be used for siblings, but what their decision fails to recognise is that a great deal of the grant is used after the baby is born to offset the high cost of looking after a newborn child. The grant is often spent on nappies, milk, other food products, clothes, medicine, and any number of other perishable items that cannot be used for more than one child.

Furthermore, while it is somewhat more likely that a family with a second child will already have the necessary equipment, it is by no means reasonable to make such an assumption. That is especially true of low-income families who will often buy cheaper, less durable equipment that simply will not last long enough to be used by later siblings. Even if it were reasonable to assume that a pram, for example, could be used for a second child as well as a first, what of the third or fourth? The estimated cost of bringing up a baby during its first year is £4,000. I know from speaking to many constituents that the £500 Sure Start maternity grant has afforded babies in Wavertree a better welcome to our world.

The Chancellor said on Tuesday that his Budget would protect the most vulnerable.

[Robert Halfon (Harlow) (Con)]

The hon. Lady talked about cuts to front-line services in her constituency and I understand her wanting to protect those services, but why even in the boom times did her Government cut front-line services in my constituency, such as closing down the Territorial Army centre, cutting the budget of Harlow college by £1.6 million and closing down the Inland Revenue office? Why are Labour cuts ignored and Tory cuts condemned?

Oral Answers to Questions

Robert Halfon Excerpts

Tuesday 8th June 2010 Commons Chamber

[Danny Alexander]

The Government are well aware of the benefits that a rural fuel derogation might bring to remote parts of the economy. We are examining that issue, which is contained in the coalition agreement, and we note the hon. Gentleman’s interests from his own constituency.

[Robert Halfon (Harlow) (Con)]

Under the previous Government, unemployment in Harlow was the highest in west Essex. Do the Government agree that a low-tax, low-debt economy is the best way to bring jobs back to Harlow?

[Mr Osborne]

May I say how particularly pleased I am to see my hon. Friend in the House? His victory was one that I found particularly satisfying on election night.

My hon. Friend is absolutely right that the ambition of a low-debt, low-tax economy is one to which people who care about the long-term economic future of this country should aspire. The key challenge, of course, is getting there, and that means dealing with the 11% budget deficit.

Economic Affairs and Work and Pensions

Robert Halfon Excerpts

Tuesday 8th June 2010 Commons Chamber

[Robert Halfon (Harlow) (Con)]

Will the right hon. Gentleman give way?

[Mr Darling]

No, I am not going to give way. I want to draw attention to one of the biggest problems that I see in the future. I know that Governments in countries right across the world have to get their borrowing down and reduce their deficits. However, I am particularly worried that, if we do not have some countervailing pressure to support growth and measures to get growth in our economy, we run the risk of having many years of it merely bumping along the bottom, sometimes growing and sometimes not. That will inevitably mean that we will have higher unemployment and that aspirations and sentiment will be affected.

I see that especially in the EU at the present time. The EUROSTAT figures published last Friday went almost unreported in this country, but what is worrying is that we see that Germany’s growth in the first quarter of this year was 0.2%. We see France’s at 0.1%. We see Greece not surprisingly, back in recession. We know that Spain has unemployment of more than 20%. I am glad that the Chancellor enjoys going to ECOFIN so much, and long may he enjoy that. I am fascinated that the Conservatives now find so much succour in Europe. All I can say to him is that I worry that rather too many finance Ministries, yes want to get their deficit down, but are not concentrating on the structural reforms that are necessary within the EU or on measures to achieve growth in the future. That is a real threat.

It worries me that the present Administration here in the United Kingdom also fall into that camp. It is interesting that in the past six months the Prime Minister has made only one speech on growth. It flickered into life in November just before the CBI conference last year. We do not hear what measures the Government intend to put in place to get the rebalancing of the economy that we want to see—measures to encourage private sector investment to come back. It is not coming back yet in sufficient volume to take the place of the public sector investment that the Chancellor wants to take away. We have to have a clear, strategic look at this to make sure that we can get growth in this country as well as in the EU, which after all is our major export market.

--- Later in debate ---

[Mr Darling]

When comparing the judgments that we make about what is necessary fiscally, I do not think that bringing on to the main balance sheet PFI, Network Rail and everything else particularly helps. However, if that is the course of action that he has managed to persuade the Chancellor to take, we will look with great interest at the Budget in a couple of weeks. I just do not think that it is a particularly accurate or informative way of looking at the accounts. I have said that before to the hon. Gentleman.

[Robert Halfon]

Will the right hon. Gentleman give way?

[Mr Darling]

For sheer endeavour, I will give way to the hon. Gentleman.

[Robert Halfon]

Before the last election, in an interview with the BBC, the right hon. Gentleman said that he believed that the cuts needed to be more savage than anything Mrs. Thatcher had done. Does he still hold to that view?

[Mr Darling]

I think that the word “savage” was used by the Deputy Prime Minister, of whom the hon. Gentleman now finds himself a great admirer. It was not a word that I used.

It is important in the task that confronts the whole country and the Government that we do not get ourselves into a situation of almost competitive austerity, in which Governments and countries become blind to the need to secure growth. There is a substantial risk, as I have said for a long time, that if the Government take action prematurely without considering its consequences as a whole, they will choke off the recovery. We have to get borrowing down, but we also have to get growth and recovery firmly established.