Road Fuel Market

Alex Ballinger Excerpts

Wednesday 6th November 2024 Commons Chamber

[Graeme Downie]

I thank the hon. Member for his intervention; I believe that taking an intervention from him is a rite of passage in this House. I could not agree more, particularly in relation to constituencies such as my own, where there is a mix of urban and rural areas and the rural pricing hits particularly hard. Those are often areas that have poorer public transport as well, so the impact is felt even more.

Most small businesses rely on efficient and cost-effective transport for their deliveries, staff and customers, and that often means running and fuelling a car or van. High prices at the pumps have a direct impact on small businesses and squeeze already thin margins in the ongoing crisis in the cost of living and of doing business. Research by the Federation of Small Businesses shows that more than three quarters of small businesses saw their costs go up in the last quarter, and of those more than a quarter said that the increased price of fuel was one of the main reasons for that rise.

My constituency is just 20 miles from Scotland’s oil refinery in Grangemouth, yet residents in Dunfermline consistently pay a full 5p a litre more than those nearby in Glasgow, Stirling, Glenrothes or Kirkcaldy. That is despite the local supermarkets Tesco and Asda, as well as a host of other outlets in the city such as BP, all supposedly competing to be the driver’s choice. What we see in Dunfermline is a cluster of prices around the same level within the city, and price clustering around Dunfermline as well, with all supermarkets and suppliers at roughly the same price. That is not local competition; that is a local cartel. Even worse, my constituents are paying 134.7p per litre at Asda in Dunfermline, whereas in the Asda Bridge of Dee store in Aberdeen, 112 miles further north, they pay just 121.7p at the pump. Never mind 5p—that is a difference of 13p per litre.

In rural and semi-rural areas, as was said earlier, where public transport infrastructure is less entrenched—certainly in my constituency, where the train service is frequently short-formed, delayed or cancelled at short notice—fuel is not a choice; it is a necessity. My Dunfermline and Dollar constituents rely on their vehicles more heavily, yet often face the highest prices. That is an issue of basic fairness. I am all in favour of market forces being used to shape prices, but not where the market is demonstrably broken, and fuel pricing has all the signs of a broken market mechanism.

It is nothing short of outrageous that the most essential aspects of daily life are subject to broken competition, a non-functioning market and what appears to be price clustering by retailers. Across the constituency, small businesses and sole traders such as plumbers, builders, florists and taxi drivers, along with families, are paying the price. As we might say in Scotland, small businesses are being pumped at the pumps. Like many fellow Members of this House, I welcome the Chancellor’s announcement in the Budget, which we passed this evening, on freezing fuel duty, which will help people who are still feeling the impact of out-of-control inflation on their take-home pay. However, while this pricing behaviour by retailers continues, I am concerned that the full benefit of the Government’s efforts to keep down fuel costs will not be passed on to my constituents.

To help the House understand fully the consequences of this kind of price clustering and the effects of a broken market, I will share the experience of one of my constituents, Aimee, a 20-year-old apprentice who wrote to me last month. Aimee was proud to secure her apprenticeship, which she started this autumn, earning the apprentice minimum wage of £6.40 an hour. With just over £1,000 a month to live on, Aimee uses £200 a month of her hard-earned wages on fuel. She gets her petrol at Asda in Dunfermline where, as I mentioned, unleaded was 134.7p per litre yesterday. Her £200 is buying her 148.48 litres of fuel. However, if Aimee was buying her petrol at Asda Bridge of Dee in Aberdeen, where unleaded was 121.7p a litre yesterday, she would have paid just £180 for the same amount of fuel. That is a full £20 a month difference. Over the course of a year, Aimee would have to work an additional 36 hours just to pay for the difference in price of petrol for her to get to and from work. That is not justifiable. Aimee, who is learning while earning, is experiencing a real-terms pay cut differential due not to anything she has done, but to the effects of this broken market.

We encourage the use of greener transport, but we have seen the failures of the SNP Government and ScotRail to provide Fife with a reliable service, so that is not an option for people such as Aimee, with short trains and unreliable service, particularly in West Fife. One step that the SNP-Green coalition at Holyrood did take was to remove peak fares, which saw a 6.8% increase in train usage. However, that encouragement of behavioural change was swiftly removed—just like the Scottish Greens from the coalition—when the financial incentive of fairer train fares was also removed.

Behavioural change of a positive nature does not happen overnight, but the switch back to the car from the train does, and has. That short-sighted decision—like the short-formed trains that often serve the region—has put people off using green transport. Having been let down by the Scottish Government, commuters in Dunfermline are being taken advantage of by fuel retailers and market competition in my constituency.

[Alex Ballinger (Halesowen) (Lab)]

My hon. Friend is making an excellent speech. I have also noticed in my constituency that many fuel retailers are not passing on benefits to drivers and, as he recognises, the Competition and Markets Authority has said that those competition practices are unfair. I notice that the Government are taking forward a fuel finder app, which will allow customers and drivers to find out more information about different retailers and will drive competition. Does he agree that the Government should do that as soon as possible, so we can get that transparent and accurate information, and drivers in my constituency and others are able to get savings on fuel?

[Graeme Downie]

I thank my hon. Friend for that intervention. I will come on shortly to the action the Government are taking and where I think there is still more to be done.

The impact goes beyond personal strain; it creates an uneven playing field for businesses, hindering economic growth by harming small business owners in Dunfermline who rely on vehicles for operation. In this Budget the Government have taken a wide range of steps to help working people across the country, including in my constituency: a wage rise for 200,000 Scots, record funding to Scotland, fixing the mineworkers’ pension scheme, protecting the pensions triple lock and, as I have said, committing funds to maintain the freeze on fuel duty that the Conservatives failed to do and which would otherwise have seen people like my constituent Aimee paying even more for fuel.

I am also pleased that this new Government have confirmed that they will implement two of the CMA’s recommendations: an open data scheme called fuel finder that will require all fuel retailers to share their prices in real time, and a road fuels monitoring function that will report on the state of competition in the road fuel market. Scenario modelling by the CMA suggests that pump prices could reduce by between 1p and 6p a litre as a result of these measures, helping to ensure that drivers get a fair deal for fuel across the UK. I am keen to hear from the Minister what more she thinks the Government can do specifically around ensuring a fair and functional fuel market, so that pricing is fair and not allowed to cluster into local price-fixing, as seen in Dunfermline.

Fuel prices are undoubtedly subject to a range of external factors, as we have seen over the years, but by increasing transparency and ensuring real competition between forecourts, we can have a functioning market where competition helps drive down prices. However, nothing is preventing fuel retailers from choosing to do the right thing right now and to stabilise fuel prices, to remove price clusters like we see in Dunfermline and to ensure that people such as Aimee are not financially penalised for where they live. I hope this Government will build on the excellent start they have made to protect working people and small businesses, and I hope we will be able to do more to stop fuel retailers profiteering on the back of hard-working people up and down the country.

Steel Industry

Alex Ballinger Excerpts

Wednesday 16th October 2024 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

It is, as always, a pleasure to serve under your chairmanship, Mrs Harris. I declare an interest as a member of the Community and GMB unions and as chair of the Community parliamentary group.

I congratulate the hon. Member for Boston and Skegness (Richard Tice) on securing what I think is the first debate on steel in this Parliament. We have had many debates on steel during the Parliaments in which I have been here. I of course agree that the steel industry is of the utmost strategic importance to this country, our economy and our security, and we must cherish it. It is vital that we protect it. I draw the hon. Gentleman’s attention to the very active all-party parliamentary group for steel and metals-related industries, which has fought for our steel industry for many years. I hope he will take an interest in that group and play a constructive part in it in the months ahead.

I chose to ask the Prime Minister my first question of this Parliament about steel and the need for the new Government, who I know are very serious about steel— we have inherited a very difficult situation—to work in partnership with businesses and trade unions to secure a transition that is right for the workforce and delivers economic growth. Because of our past, we in Wales know well that deindustrialisation can be devastating for our communities. In his reply to me the Prime Minister confirmed that he understands that we need our steel in this country and need it made in this country, and we are going to need more, not less. We need steel to deliver our green infrastructure. It is the duty of the Government to ensure that jobs, communities and people are not ignored in the transition.

[Alex Ballinger (Halesowen) (Lab)]

I thank my hon. Friend for giving way and the hon. Member for Boston and Skegness (Richard Tice) for securing this important debate. The west midlands region is the third largest region for the steel industry, with 5,000 jobs generated there. In my Black Country constituency of Halesowen, many jobs are in the steel sector, including at Crosby’s forge, which I was lucky enough to visit a few months ago. Although I support the green transition, does my hon. Friend agree that a decision is needed to consider what is right for the workforce in the steel industry? Any decision should safeguard the future of the steel industry in the west midlands.

[Jessica Morden]

The steel industry is important for many of our communities and, as we know, on average jobs in the industry pay more in the communities that really need them, such as mine in south Wales and my hon. Friend’s. I agree that our communities and the downstream industries that depend on steel should have a fair and just transition. I look forward to working on this issue with the new steel Minister, my hon. Friend the Member for Croydon West (Sarah Jones), and with the steel unions—Community, GMB and Unite—which stand up strongly for their workforce, have worked incredibly hard for their members, and understand the value of those jobs, as well as with the trade body UK Steel.

For us in Wales, and clearly in Scunthorpe too, it has been an extremely challenging time for the steel industry. The deal for Port Talbot inherited from the last Government means support for the new electric arc furnace to secure the long-term future, but the closure of the blast furnaces means heavy job losses. The new Government’s deal is better than the plan announced by the last Government in September 2023—it sees improved redundancy packages and training, as well as more commitments on investment —but if this Government had been able to start negotiations even a year earlier, I have no doubt that they would have got an even better deal.

Over the last 14 years, Members who represent steel communities, including my hon. Friend the Member for Aberafan Maesteg (Stephen Kinnock), fought hard for investment and an industrial strategy for a fair transition—or simply for any kind of plan—from the Conservative Government, but we were fighting a Government who had no industrial strategy, just occasional sticking-plaster solutions. There was a revolving door in the Department that saw 12 steel Ministers come and go. That was a dereliction of duty that left the steel industry in an extremely perilous position. It was woeful neglect.

I am pleased that the new Government acknowledge the scale of the challenge. Labour Members have never believed that decline is inevitable; we want to see the industry not just adapt but thrive. I welcome the Secretary of State’s announcement that there is to be a steel strategy in the spring. I look forward to Members being part of it and to the Government giving us a long-term plan, which we have desperately needed.

I am proud to have represented Llanwern steelworks as the constituency MP for almost 20 years. I pay tribute to the workforce and the trade union reps, who have been through phenomenally difficult times but are passionate and committed to what they do. We produce world-class products in Llanwern. Our automative steel is fantastic. I hope that the commitments on investment in Llanwern that the new Government secured in their deal with Tata will keep the site and its world-class workforce at the cutting edge of steelmaking. Llanwern is a living example of the potential that investment and innovation can bring to our industrial heartlands. In recent months it has reached a new output record of 14 kilotonnes in a week, following the introduction of new technology on the ZODIAC—zinc and other developments in alloy coatings—galvanising line.

I come to my asks. UK steelmakers need competitive electricity prices. As I have said many times in debates on steel over the years, they pay 50% more than competitors in France and Germany, and that adds £37 million to UK steel electricity costs. Will the Minister address that when she responds to the debate, and at least commit to tracking the disparity between countries? We must address the issue of the UK carbon border adjustment mechanism. UK Steel asks that we move forward the implementation in line with the EU, which is implementing it in 2026, lest displaced steel from the EU flood into the UK.

With steel safeguards expiring in 2026, we must work with the industry to address the issue of global overcapacity. This year alone, China is expected to export 100 million tonnes of steel—equivalent to the entire UK steel supply for 13 years. That is a significant threat with the potential to impact any Government support for the industry elsewhere. I also hope that procurement will be at the heart of the steel strategy. With this Government’s ambitions for house building, new energy projects, wind turbines, and offshore and onshore wind, we will need lots of steel. Let us make sure that it is UK steel.

Steel is vital to any climate solution, and steelworkers themselves accept the need to decarbonise, but they need to partner with a Government who are committed to a just transition. I know that with this steel Minister, my hon. Friend the Member for Croydon West, we can all work together to ensure that.