Beer Duty Escalator

Andrew Percy Excerpts

Thursday 1st November 2012 Commons Chamber

[Peter Aldous (Waveney) (Con)]

I am grateful to my hon. Friends the Members for Burton (Andrew Griffiths) and for Leeds North West (Greg Mulholland) for securing the debate and for their hard work and to the 104,000 people who signed the e-petition. I wish to speak in favour of the motion, and there are compelling reasons for doing so. First, if we do nothing and carry on regardless, an iconic British business will wither on the vine—or should I say the hop? Secondly, small businesses will close at an accelerating rate, with a devastating impact on individuals, families and communities, both urban and rural. Thirdly, it is important to base fiscal policy on well-founded and up-to-date research. Times have changed significantly since 2008.

Indeed, the face of the industry has changed dramatically over the past 30 years. In East Anglia, great names such as Lacon’s, Bullard’s, Mann’s, Tollemache and Cobbold have long gone. Visionary and iconic businesses remain: Adnams, St Peter’s brewery and Green Jack in my constituency, the latter being the most easterly brewery in Britain. We owe it to them to promote a level playing field on which they can develop their businesses, play a full role in the economic recovery and create new jobs.

If we go on as we have been doing, we will kill the goose that lays the golden egg. Beer duty has risen by 40% since 2008, yet the pub trade has shrunk by a third over the same period. Britain pays over 40% of EU beer tax but consumes only 13% of beer sold in Europe. Investment in the beer and pub sector has shrunk dramatically, from over £2 billion in the late 1990s to £600 million in 2010. A sector that employs 1 million people, often young people, needs nurturing, not suffocating.

If there was a rationale for introducing the escalator in 2008, it has long since gone. Time are very different: inflation, VAT and input costs are all higher; there has been a poor harvest; energy costs are higher; and these are compounded by a fall in household incomes. The escalator today is in many respects a straitjacket; it is no longer fit for purpose in these straightened times.

It is important to bear in mind the unique nature of the industry, the effect of the punitive form of taxation and its potential for growth if properly nurtured. It is very much a British industry, with a supply chain that creates a significant number of jobs. As we have heard, one job in brewing supports one job in agriculture, one job in retail, one job in distribution and 18 jobs in pubs and clubs. In my constituency, more than 1,200 people are employed directly or indirectly as a result of the industry, and there are nearly 100 pubs and the industry puts £26 million into the local economy. Some 85% of pubs are small or medium-sized enterprises, the foundation stone on which we must build the recovery. They are particularly vulnerable to rises in duty, being less able to absorb duty and other cost increases. It is also important to take into account the community and social benefits of pubs, both in villages and in urban areas.

Pubs are under attack on all fronts. The landlords who lease from pub companies find themselves confronted with excessive rent increases. Landlords find themselves strangled by red tape; lock-ins have long since gone, having been replaced by late-night sessions of burning the midnight oil and completing VAT returns. Many are told, “You don’t want to rely on beer; you want to get into food.” Yet landlords find themselves competing on an unlevel playing field with supermarkets as they have to charge VAT on their sales.

[Andrew Percy (Brigg and Goole) (Con)]

On that point, I commend the Percy Arms in Airmyn, a pub that has transformed itself, but purely around food, because making money out of beer has become almost impossible.

[Peter Aldous]

My hon. Friend makes a good point.

It would be churlish not to commend the Government for the good work they have done. They have made it easier for pubs to put on live events, they have introduced the community right to buy through the Localism Act 2011, and the forthcoming proposed introduction of a minimum unit price for alcohol will help to provide a level playing field.

However, the elephant in the room remains. This brings me back to the motion and the need for a full review of the economic and social impact of the escalator before decisions are made in next year’s Budget. Tax policy must be underpinned by proper research. The research that has been carried out shows that there will be devastating unintended consequences if the escalator is retained. Oxford Economic Research Associates has shown that if the rise goes ahead, there will be 5,000 job losses and the additional beer duty received will be offset by a loss of employment, lower revenues from other taxes and an increase in social security spending. I urge the Government to carry out the review with all haste.

Multiannual Financial Framework

Andrew Percy Excerpts

Wednesday 31st October 2012 Commons Chamber

[Greg Clark]

My hon. Friend is totally right. The last time the country had the misfortune to be in the hands of a Labour Government, including the shadow Foreign Secretary, who was Europe Minister at the time, far from agreeing even a real-terms freeze or a cut, they increased the budget over seven years by 8%. That is the record of the Opposition.

It is not just the overall total. Once more we see the usual suspects circling round Britain’s budget rebate. That rebate was secured for future generations by Margaret Thatcher at Fontainebleau—the rebate which Tony Blair and his Europe Minister, now the shadow Foreign Secretary, put on the table in 2005, in the negotiation of the current multiannual financial framework. Of course, when I say negotiation, what I mean is unconditional surrender, giving away in perpetuity a large part of the rebate in return for nothing. If seven days is a long time in politics, seven years is even longer. The amendment to the motion would delete all mention of this betrayal. The act would be forgotten, but the consequences have not gone away.

[Andrew Percy (Brigg and Goole) (Con)]

The position of the Opposition is truly incredible, given their record in government. However, the problem that the good people of Brigg and Goole have with the multiannual financial framework is that all we can do is hope for a freeze as potentially the best outcome. Does that not show just how much the European Union has managed to take away the sovereignty of this country?

[Greg Clark]

Every budget negotiation under the seven-year framework has resulted in an increase. That must now stop. The next seven years must see an end to the perpetual ratcheting up of EU spending. The Prime Minister will be looking to achieve precisely that. As far as the Government are concerned, what remains of the rebate, after the predations of the Labour party, is absolutely non-negotiable. That means that even talking about it is a waste of time. Without it, our net contribution would be by far the largest in the EU, twice as big as that of France and more than one and a half times that of Italy or Germany as a percentage of gross national income.

Draft European Union Budget

Andrew Percy Excerpts

Thursday 12th July 2012 Commons Chamber

[Chris Heaton-Harris (Daventry) (Con)]

This subject has been omnipresent throughout my political career. For 10 years, I served on the European Parliament’s Budgets Committee and Budgetary Control Committee.

[Andrew Percy (Brigg and Goole) (Con)]

You get less for murder.

[Chris Heaton-Harris]

Yes, indeed.

I am very keen that the Government get their principles in line and their priorities straight. I want to explain why the amendment tabled by the Opposition is complete rubbish and to give the Minister a feel for why many Conservative Members think that we need to be doing slightly more, in a slightly stronger way, to achieve the aims that I think we all agree on, given that the European budget is way too high.

This year is important in budgetary terms because 2013 is the last year of the current multi-annual financial framework. The work that is done now on the 2013 budget will hold firm for next multi-annual financial framework, within which the Commission is bidding for a lot more money. That is significant for the United Kingdom.

The Commission raises this money in a number of ways: direct payments from national Governments based on each country’s gross national income, a levy on each national Government that takes a slice of their VAT income, customs duties on various imports from outside the EU, and levies on sugar production. That accounts for about 99% of the budgeted income of the European Commission. To put that into scale, in 2010 the UK’s gross contribution to the EU budget was €14.66 billion and we received back €6.75 billion, equating to a net contribution of €7.91 billion.

[Chris Heaton-Harris]

That is a correct assumption. A number of those projects would not have been financed by this Government or by previous Governments, so the money is being diverted into different things. That is why the last Prime Minister, when he was Chancellor of the Exchequer, mooted the idea of repatriating those moneys.

[Andrew Percy]

I agree that the Labour amendment is total nonsense. Is it not true that a lot of money is being spent on infrastructure projects in parts of the European Union that are wealthier than the area that I represent, where a great deal of Government funding is being cut? That is completely unacceptable to my constituents.

[Chris Heaton-Harris]

I agree with my hon. Friend that it is a difficult ask for us to explain to our constituents why no money is forthcoming for reasonable projects in our areas, when we are giving money to richer areas across the European Union through the regional structural funds. That is an aberration that we should look at seriously.

We were the second largest net contributor to the European Union in 2010. Germany was ahead of us with €11.95 billion. Behind us were France with €6.48 billion and Italy with €5.84 billion. Obviously, Italy is not the richest country in the world at the moment, so it, too, is trying to do something about its net contribution. The largest net recipients in 2010 were Poland with €8.17 billion, Greece with €3.44 billion and Spain with €3.1 billion. So there are lots of fiscal transfers across the 27 member states.

Many other costs are hidden in the European Union budget.

VAT on Air Ambulance Fuel Payments

Andrew Percy Excerpts

Wednesday 11th July 2012 Commons Chamber

[Catherine McKinnell]

Indeed. We all know of very moving stories in our respective localities where lives have, without doubt, been saved by air ambulances.

As the hon. Member for Hendon (Dr Offord) said, air ambulances have come an awfully long way since their early days. They are now high-tech, mobile A and E departments carrying senior trauma doctors alongside paramedics and transporting state-of-the-art medical equipment to wherever it is needed.

[Andrew Percy (Brigg and Goole) (Con)]

I recently met people at Lincolnshire and Nottinghamshire Air Ambulance, to whom I pay tribute. They told me about some of the other problems they face, apart from VAT. Does the hon. Lady agree that there are other issues that we need to address, such as the fact that while some hospitals can accept air ambulances, others will need a land-based ambulance transfer?

[Catherine McKinnell]

The hon. Gentleman makes an important point, and I am sure that the Minister will take it on board and deal with it in his response.

Only a few months ago, air ambulances proved that they are at the cutting edge of technology. As the hon. Member for Hendon pointed out, we are in an ever-progressing medical world where we need to keep constantly under review all the services that provide vital care to people, but particularly the air ambulance service. A few months ago, for the first time, an air ambulance carried blood supplies allowing a blood transfusion to be carried out at the scene of an accident. London’s air ambulance service believes that this innovation has been made possible due to a new refrigeration unit devised by the British military, and it could no doubt save hundreds of lives in the years to come.

It is no wonder that air ambulances continue to receive such outstanding support from members of the public and that over 150,000 people have been moved to sign the petition. I do not think that anyone would disagree that we have to support such services. However, as has been discussed, there are other issues relating to EU law and the harmonisation of VAT legislation across member states. Members have already mentioned the anomaly whereby fuel for lifeboats is VAT-free. As hon. Members and members of the public who have signed the petition have noted, there is no equivalent provision in these EU-wide rules to allow for fuel bought by charities such as air ambulances to be provided VAT-free, although various provisions such as medical equipment and first aid kit are VAT-free, and air ambulance providers that lease the air ambulance rather than buying it outright receive different treatment for VAT. Air ambulance services are put in a difficult position when there are anomalies within the VAT system and they are subject to change.

The motion calls on the Government to review the tax treatment of air ambulances and their fuel and to carry out the requested study on compensating them for VAT payments. I will be interested to hear the Government’s response to that, but there is more that they could do to try to help these life-saving services. As we all know, we are living in difficult times. Our economy is in a double-dip recession; borrowing forecasts are rising, not falling, and not only families and businesses are feeling the pressure and the squeeze but charities and organisations in the voluntary sector, which have been hard hit by the cuts that have been made. Collectively, air ambulances are one of the busiest voluntary services in the country. As charities, they rely on the support of over 1.25 million donors to keep them going. Air ambulances save hundreds of lives every year. They are expensive, but for those who benefit from the service they provide, they are priceless. The average spend per helicopter is more than £750,000. Put simply, without charitable donations and funding, these life-saving services would not exist. The men and women of these emergency teams work tirelessly. The Government should do all they can to support them.

There are changes that the Government could make immediately to ease the pressure on air ambulance services and other charities. As part of Labour’s five-point plan for jobs and growth, we are calling on the Government to introduce a temporary reduction in VAT to 17.5% to bring down the cost of fuel across the board. Air ambulances and motorists alike would benefit from that. Since the Government increased VAT, people across the country have been feeling the squeeze. Equally concerning is the impact it has had on charities. It has cost them an overwhelming £143 million.

With air ambulances using about 130 litres of fuel on every mission, a decrease in the rate of VAT would bring immediate relief to those services up and down the country—so too would clarity on the Government’s position on fuel duty, because it would allow services to plan for the future. The Labour party called for the 3p rise in fuel duty that was scheduled for August to be delayed to help hard-pressed motorists. Although we welcome the U-turn on that, it would be helpful if the Government explained what they will do in the long term on the price of fuel and how they will put it on a more sustainable footing for motorists and for air ambulance services.

As well as responding to the request in the motion put forward by the Backbench Business Committee, the Government could usefully respond to some additional questions to reassure air ambulance services that they have the support of the Government and that the Government are doing all they can in these difficult times to ease the pressure on them, so that these hard-working teams can continue to save lives and carry out their excellent work. What plans do the Government have to provide support to the thousands of charities that are increasingly performing vital services in our communities and that are struggling as a result of the increases in VAT and the cuts to funding? How do the Government intend to pay for the delay in the 3p fuel duty rise in August? What are the Government doing to put the cost of fuel on a more sustainable footing to help not just households and businesses, but vital charitable services? Finally, what assessment has the Minister made of the possibility of offsetting the cost of VAT on fuel payments by air ambulances through the use of other departmental budgets or anticipated departmental underspends?

Finance Bill

Andrew Percy Excerpts

Tuesday 3rd July 2012 Commons Chamber

[Mr Gauke]

We assessed what the impact would be if VAT was at 20%, and obviously 5% is a quarter of that, so one can draw correlations. Most industries supply VAT-inclusive durable goods at a profit, so it is reasonable to apply VAT in this case. The impact that we originally set out in the tax information and impact note at the time of the Budget will be significantly lessened by the change to the 5% rate, particularly bearing in mind that there is already a full 20% rate on a fair proportion of static caravans because of the durable goods contained within them.

[Andrew Percy (Brigg and Goole) (Con)]

We can partly assess what the impact will be from what manufacturers themselves have said, which is that they do not expect the 5% rate to have an impact of any great severity on them. However, it is important to recognise that there needs to be stability, so an assurance that the Government will not raise the rate in future would be welcome, as would an undertaking that there will be an assessment of the rate after a year or two to see whether it has had any impact. Generally, the industry has welcomed it.

[Mr Gauke]

My hon. Friend is right to say that the industry has welcomed the change to our policy. As we would expect, it does not anticipate the 5% rate to have a significant impact on it. As far as the stability of the rate is concerned, the standard wording is to say that all decisions are for the Chancellor and all taxes are kept under review, but I do not anticipate that the Government will return to this issue in any great hurry. I am sure my hon. Friend will be pleased about that. Were we to do so, I have no doubt that he would make strong representations once again. I hope he will take some comfort from that.

--- Later in debate ---

[Catherine McKinnell]

The figure that the hon. Gentleman is looking for is £450 for a couple with children. It would put money back into their pockets, boost the economy and drive growth. Let us not forget that the Institute for Fiscal Studies has predicted that the Government’s tax credit changes will mean that families will be £511 worse off this year and £1,250 a year worse off by 2015.

[Andrew Percy]

Who would benefit more from a VAT cut, a family earning just above the minimum wage or a millionaire?

[Catherine McKinnell]

Clearly, a family would gain more from a VAT cut because they spend much more on VAT as a proportion of their household income. The hon. Gentleman’s indignation at that response demonstrates just how much the Government are out of touch with the reality of the effect of their spending plans on households and household incomes. That would explain why this economy is going backwards rather than forwards under the Government’s plans.

--- Later in debate ---

[Catherine McKinnell]

It all depends on how long the Government take to get the economy back into growth. The reaction of Government Members seems strange, when they are driving the economy into recession rather than into growth.

[Andrew Percy]

The hon. Lady will be aware that the temporary reduction under the last Government had a significant cost impact on a number of businesses. If the economy suddenly went into growth in the quarter following the reduction, would she expect businesses to take the burden of the costs of implementing the reduction and then unimplementing it in two successive quarters?

[Catherine McKinnell]

The hon. Gentleman is getting ahead of himself, given that we are in a double-dip recession, that growth has stalled, that all the predictions of the Office for Budget Responsibility are being revised down day on day, and that borrowing is going up. Everybody agrees that we need demand in the economy. The way of generating demand in the economy is to put money back into people’s pockets. I remind hon. Members that before the increase in VAT, the economy was on a trajectory of growth. That was before this Government took over and brought in their disastrous austerity policies.

--- Later in debate ---

[Mr Field]

I am grateful for the intervention. Unfortunately I cannot give an answer, but I will redirect the question to the Minister. This time, I hope that he will give us an answer and—I hope even more—say that the Government intend to take action.

[Andrew Percy]

It is a pleasure to follow the right hon. Member for Birkenhead (Mr Field), who made an interesting contribution, on an issue that I was not planning to speak about, but which I hope will be pursued if his new clause is not accepted this evening.

This has been an interesting debate. I am only sorry that the Minister’s attempt to take us through every VAT change since 1973 was cut somewhat short. We got to about 1983, which was probably as far as most of us needed to get, but it was interesting none the less. The debate has also been interesting because of the number of food products that have been mentioned. At one point, when we were talking about rotisserie chickens, pasties and sausage rolls, I thought it was lunchtime at the Percy house, but apparently not. I am proud to say that I eat pasties: I ate my last one from Fuller’s bakery on the precinct in Goole just the other day. I cannot say that I partake of sports drinks, so I will not take much of an interest in that part of the debate, but I am certainly pleased that the Government have seen sense on pasties. I am not sure that I necessarily share the full analysis offered by my hon. Friend the Member for Truro and Falmouth (Sarah Newton) about the seamless transition of policy. I do not think it has necessarily been the Government’s finest hour, but at least at the end of the process we have a system with which we can all live.

I want to make a few brief comments about the caravan tax. It is a pleasure to see my hon. Friend the Member for Beverley and Holderness (Mr Stuart), who assisted with—[Interruption]—sorry, who led the campaign. I chide him with an in-joke. He led the campaign very ably and got us all together. He deserves credit for that, and I am pleased to see him here for this debate. The impact that the measure would have had is well documented in the various debates we have had. The Minister knows from the meetings we had with him that we were very concerned, particularly in our part of the world, where the vast majority of the relevant manufacturing is and where a lot of the supply chain is based, including, in my constituency in Brigg, a number of companies that were affected. I also have some of the parks that would have been affected in my constituency. I am pleased to see my hon. Friend the Member for Cleethorpes (Martin Vickers), who would have similarly been greatly affected, from the point of view of the park owners, had the measure gone forward. It is therefore incredibly important that we have reached the position we have.

Some genuine points have been made about the consultation. One needs only to do a Google search to find headline after headline, in both local and national papers, about the state in which the industry has found itself in recent years. Indeed, it had to go to the previous Government looking for support, although I am not sure that a great deal was forthcoming. We are talking about an industry that has struggled considerably over the past few years, so quite who came up with the idea of slapping on 20% VAT, thereby affecting sales by up to 30%, I do not know, and I hope that some lessons will be learned. I prefer to see what the Government have done not as a U-turn, however. There was a US politician who used to describe a U-turn as a recalibration of policy, so I welcome this recalibration of policy. It is a shame that the previous Government did not do that on more occasions, as my hon. Friend the Member for Beverley and Holderness mentioned.

--- Later in debate ---

[Mr Graham Stuart]

rose—

[Andrew Percy]

I give way to my hon. Friend, who led the campaign.

[Mr Stuart]

I am grateful to my hon. Friend. Now that a 5% VAT rate has been introduced, does he agree that any Government, whether the coalition or a future Labour Government, would be ill-advised to return to this issue with any form of increase? The level of 5% can be accepted. People do not pay council tax on these caravans. We are talking about a compromise, but one that can last, that the industry can live with and that the political establishment should live with. Indeed, no Government should ever think of returning to the issue at any time while even someone as young as my hon. Friend is in this House.

[Andrew Percy]

I am being abolished at the next election anyway, so there are only three years in which the Government might have to worry about me. However, they would frankly be stupid—if that is not unparliamentary language—to look at the issue again. I think any Government will take note of the campaign.

The final assurance I seek from the Minister is that we will continue to be conscious that there will still be a potential impact, as was mentioned in interventions by the hon. Member for Kingston upon Hull North (Diana Johnson), who also fought valiantly. I hope that the Treasury will continue to monitor that.

In the final minute, I want quickly to say something about the Opposition’s VAT cut for millionaires, which I think is what they are proposing. Whereas we on this side of the House have decided to target tax changes at those struggling the most—for example, by raising the personal allowance and taking some of the poorest out of tax altogether—the Opposition policy is to issue a massive VAT cut for high earners and millionaires, and just to pepper money around. The Opposition are not quite sure how much—they have not told us, although we think the figure might be £12 billion—and they do not know for how long the measure would be in place. What a policy! The interesting thing we have learnt is that we now know that the Opposition’s official policy is to support, ultimately, VAT at 20%, because they have said that the measure would be temporary, meaning that they have therefore definitely agreed the 20% rate.

[Julie Hilling]

Will the hon. Gentleman give way?

[Andrew Percy]

No, I am not going to give way, because other people want to speak.

The shadow Minister talked a lot about VAT consultation and the Government’s failure, she said, to consult on the changes. I just wonder whether she has consulted very widely on her proposal to reduce the rate temporarily to 17.5%, because I suspect not.

[Diana Johnson]

It is a real pleasure to follow the hon. Member for Brigg and Goole (Andrew Percy), who, with characteristic humility, accepted that bringing forward these VAT proposals was not the Government’s finest hour, unlike the hon. Member for Truro and Falmouth (Sarah Newton), who unfortunately is no longer in her place. She has a rose-tinted view of the shambles of this Budget and the proposals that have been put forward, which caused consternation, upset and distress to many individuals and businesses around the country. However, she now seems to think that we should be celebrating the fact that the Government have had to cobble together this compromise.

I shall be supporting new clause 10, which was tabled by those on our Front Bench, and I want to speak against the Government’s new schedule 1. Our opposition to new schedule 1 underlines Labour’s commitment to having low taxes, because it would implement a tax increase, including the 5% VAT on caravans, which I want to address.

Petrol and Diesel

Andrew Percy Excerpts

Wednesday 23rd May 2012 Westminster Hall

[The Economic Secretary to the Treasury (Miss Chloe Smith)]

I sincerely congratulate my hon. Friend the Member for Harlow (Robert Halfon) on securing this debate. We are all aware of the passion with which he and other Members who have spoken campaign. So many have contributed to this discussion that I will struggle to name them all, but I shall endeavour to address the breadth of the debate.

I shall start by saying, as my hon. Friend did, that even though average pump prices have fallen by about 6.5p over the past month, there is little doubt that the price of petrol and diesel remains a very difficult issue and a concern to many families and businesses throughout the country.

Since we came to office, the Government have listened to those motorists and the many others who are concerned about high pump prices. Motoring is an essential part of everyday life for many households and businesses. Fuel costs affect us all in various ways, and the Government recognise that the rising price of motoring fuel is a significant part of day-to-day spending.

I will give a little historical context by noting that in 2009 the previous Government introduced a fuel duty escalator, which was a time bomb that involved planning for seven fuel duty increases. That could have resulted in average pump prices being a whole 10p per litre higher than they are at present. The previous Government would then have introduced further above-inflation increases in 2013 and 2014. None of those planned increases were subject to either oil price or pump price movements, unlike the fair fuel stabiliser that we have introduced.

We know that high oil prices are causing real difficulties in ensuring that motoring remains affordable. It is important to remember that pump prices are affected both by world oil prices and by duty rates, as I know all Members present will understand. It is important that a responsible Government are able to consider their actions and take them in that context. Although the Government cannot control world oil prices, they can control duty rates, which is what this Government have done. We have acted by providing £4.5 billion-worth of relief on the burden for motorists between 2011 and 2013. Indeed, VAT and fuel duty last rose in January 2011.

[Andrew Percy (Brigg and Goole) (Con)]

The Minister is right to say that the Government cannot control oil prices, but they can stop the European Commission attempting to frustrate the development of the Canadian oil sands, which has the potential to offer billions of barrels of oil to the US market, which will help bring prices down.

[Miss Smith]

My hon. Friend is right to highlight the complexity of the global market and its relevance to this debate. I suspect that there is a much broader debate to be had about where we might look for energy security and breadth of supply in the future, but he is right to raise that point.

On the impact of what the Government have been able to do, duty at the pump has been frozen for 16 months and pump prices are now 10p lower thanks to this Government’s actions. To put that into pounds, as other hon. Members have endeavoured to do in their contributions, a typical Ford Focus driver will be £144 better off as a result of those actions, and a haulier will benefit by £4,400 on average.

I understand why the August duty increase is one of the main points that has been raised. I am well aware of the burden caused by the rise in the international oil price and the concern it creates for businesses and families. This is, after all, a time of real uncertainty and instability from which no country can be immune. Britain has been comparatively stable in recent weeks. Only yesterday, the International Monetary Fund said that our approach is right and that we have earned Britain credibility again in our economy. Families and businesses benefit from that earned credibility, through lower interest rates.

Calls for the August increase to be scrapped raise an important question, because we would need to consider how to replace the £1.5 billion it would cost. That money would need to come from higher taxes or lower spending elsewhere.

The Centre for Economics and Business Research report that has been cited today has a couple of weaknesses. Its analysis is not straightforward. For example, it makes no mention of the relationship between oil prices and pump prices. It does not recognise the range of factors that go into pump prices. As such, its proposed fuel duty cuts could be totally offset by increased oil prices, which means that there may not be any reallocation of spending elsewhere in the economy. It is important to place that point about this frequently cited report on the record. We really need to consider the volatility of global oil prices. Any Government action would have to be taken against that backdrop. It is not certain that cutting fuel duty would have a positive effect on families or businesses.

Instead, the Government have taken action to help in areas in which we can be sure of a positive impact: supporting businesses through cuts in corporation tax and helping families through increases in the personal allowance threshold, which means pounds back in the pocket.

Finance (No. 4) Bill

Andrew Percy Excerpts

Wednesday 18th April 2012 Commons Chamber

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

Order. I remind Members that I will turn to the Minister at 7.40, which means that I will stop the Member who is making a contribution at that time.

[Andrew Percy (Brigg and Goole) (Con)]

I rise to support the comments that have been made by my right hon. and hon. Friends from across east Yorkshire, who have outlined the terrible impact that the so-called caravan tax will have on the county. For the sake of brevity, I shall not repeat their arguments.

Instead, I shall concentrate on a particular document that has caused me considerable alarm. It has also alarmed one of the park owners in my constituency. My constituency also covers part of Lincolnshire, which contains a large number of holiday parks that will be affected by the measure. The HMRC document that outlines a summary of the impacts says of the economic impact:

“This measure might lead to a small increase in the price of static caravans”.

Even I can do the maths on that one, even though my bank balance might suggest otherwise. Applying 20% VAT to the price of a static caravan is not a small increase; it is a considerable increase. One of my park owners told me that the manufacturers sell their units for an average price of £25,000. Doing the math, as the Americans would say, we discover that that will mean an increase of £5,000, which is not a small increase at all.

That same park owner also wanted me to pass on to Ministers a point that I thought we all understood—namely, that businesses make decisions based on the tax regime that is in place, and that they look forward and make those decisions for the many years ahead. Another of my constituents has invested £500,000 this winter to extend the number of pitches on a holiday park that currently has 450 pitches. He said that the tax change would make it almost impossible for him to continue to employ the same number of people that he does at present, or for that expansion, in a relatively depressed area, to go ahead. I urge colleagues across the House to vote tonight to save that industry.

[Frank Dobson (Holborn and St Pancras) (Lab)]

As the chair of the all-party parliamentary group on historic places of worship, I have been approached by people from all over the country and asked to come out against the proposal to take away the zero VAT rating on alterations to listed places of worship. Such alterations include improved access for the disabled, the installation of toilets and small kitchens, the provision of better heating and lighting and the introduction of more energy-efficient measures. They are not just for the congregation; they are for the whole community. They encourage the community use of religious buildings and make an increasing contribution to attracting tourists all over the country. These church buildings are vital, whether they be vast edifices like York Minster, of which as a York lad I am immensely proud, or small parish churches all over the country. The Government need to look again at this silly, stupid, unprecedented and unconsulted-on proposal.

Prevention of Nuclear Proliferation

Andrew Percy Excerpts

Tuesday 13th December 2011 Commons Chamber

[Andrew Percy (Brigg and Goole) (Con)]

I rise to support the motion and the words of the Minister. Some of the shadow Minister’s comments about wanting to see an international extension were perfectly reasonable, but I do not think that that alone should have prevented us from acting on our own, and acting with the United States and Canada was entirely correct.

A great deal has been said that I do not wish to repeat, although I endorse what my hon. Friend the Member for Harlow (Robert Halfon) said about comparisons between Israel’s having nuclear weapons and the acquisition of those weapons by the despotic regime in Iran. We are talking about two completely different Governments and to try to mix them up is unhelpful, to be polite about it.

I do not think that anybody who has spoken today has in the slightest attempted to denigrate or insult the history of Iran or the Iranian people. The issue that we all have is with the Iranian regime; the debate has been consensual in that we have all expressed our outrage at what that does to its own people. I do not think that those who urge us to go further are in any way seeking to denigrate the Iranian people or their history.

[Jeremy Corbyn]

I appreciate that the hon. Gentleman is not trying to denigrate anybody, but unfortunately the history of interventions is that, however supportive people are or odious the regime is, we end up with an awful lot of wholly innocent civilians being killed, as happened in Afghanistan and Iraq. None of us wants to see that in Iran.

[Andrew Percy]

I do not think that anybody wants to see conflict in Iran; more importantly, none of us wants Iran to acquire a nuclear weapon at all. We are on the same page on that one.

[Jeremy Corbyn]

We have nuclear weapons here.

[Andrew Percy]

That is a different debate for a different day, but I would rather that nuclear weapons were in the hands of the United States or this country than in the Iranian regime’s, as it is currently constituted.

The hon. Member for Hayes and Harlington (John McDonnell) commented on the International Atomic Energy Agency report—[Interruption.] I apologise for my croaky throat, Madam Deputy Speaker; it is difficult to get my words out. The hon. Gentleman’s conclusions were slightly different from those drawn by others. I want to remind him of a couple of things in that report. Crucially, the report found evidence that Iran has procured

“nuclear related and dual use equipment and materials by military related individuals and entities”;

has developed

“undeclared pathways for the production of nuclear material”;

has acquired

“nuclear weapons development information and documentation from a clandestine nuclear supply network”;

and has worked

“on the development of an indigenous design of a nuclear weapon including the testing of components”.

Further evidence is provided by the reports that we have seen about the high explosive test sites, the neutron initiator and the uranium enrichment, which all prove that Iran is closer than ever to a nuclear weapons programme.

There has also been the non-co-operation with the IAEA, of course—we know that inspectors are consistently barred from entering Iran. In some cases they have been expelled; in 2007, 38 inspectors were expelled. We can read a great deal into the response of the Iranian regime to the IAEA findings; it simply dismisses them as having been written by people acting on behalf of the United States or its western allies.

I do not think that the report’s conclusions were quite as the hon. Member for Hayes and Harlington suggested. We should be extremely concerned. It is absolutely right that we act as we have been acting and show leadership on the issue. Yes, we would like other European countries to come on board, but acting as we have, along with the United States and Canada, is right for this country and what we are all trying to achieve—Iran never getting hold of a nuclear weapon. I associate myself with many of the comments made in this debate and I endorse the position of the Government.

Autumn Statement

Andrew Percy Excerpts

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

We absolutely will apply the Barnett formula to the infrastructure spending. I can confirm that. We specifically want to work with the devolved Administration on the M4 corridor in south Wales and, if possible, to do a deal on the future of the Severn bridge and its tolls. We are holding open the opportunity for discussion on that matter.

[Andrew Percy (Brigg and Goole) (Con)]

I thank the Chancellor for his announcement about the Humber bridge and commend the work of the Transport Secretary. Does he agree that that proposal will benefit low-paid workers, especially in the Humber, who have suffered even in the times of growth, when the number of private sector jobs in the Humber decreased?

[Mr Osborne]

I pay tribute again to my hon. Friend and the other MPs in the area, including my hon. Friend the Member for Beverley and Holderness (Mr Stuart) who first raised this issue with me some years ago.

Fuel Prices

Andrew Percy Excerpts

Tuesday 15th November 2011 Commons Chamber

[Robert Halfon]

I understand and agree with the sentiments expressed by my hon. Friend the Member for Wells (Tessa Munt). I am grateful to her for supporting the motion and for backing me at the Backbench Business Committee.

[Andrew Percy (Brigg and Goole) (Con)]

Will my hon. Friend give way?

[Robert Halfon]

I will not give way again because of what Mr Deputy Speaker has just said. I apologise to my hon. Friend.

I will turn to the social impact. In Harlow, the cheapest unleaded petrol costs £1.33 per litre. Most Harlow motorists are therefore spending £1,700 a year just to fill their tanks. For most people, that is the equivalent of £2,200 of income before tax—a tenth of the average Harlow salary. I met a Harlow man called Mr Barry Metcalf a few weeks ago. He is self-employed and uses his own car to commute to West Ham for work. He spends nearly £60 a week on fuel and has seen a 35% increase in the past year or two. The Government define fuel poverty as spending a tenth of one’s income on heating bills. What about spending a tenth of one’s income just on driving to work?

Of that £1,700, about £1,000 is taxation. That is why fuel duty is like a second income tax. The Office for National Statistics confirmed yesterday that fuel duty is regressive and that the poorest are hit twice as hard as the richest. Fuel duty is not just about economics; it is an issue of social justice. That is especially true in rural communities, which are being destroyed by fuel prices.

In conclusion, there is a strong financial, economic and social case for cutting fuel taxes. That is why we urge the Government to scrap the planned 4p fuel duty increases that are scheduled for January and August 2012; to create a genuine price stabilisation mechanism that smoothes out fluctuations in the pump price; to pressurise the big oil companies to pass on cheaper oil to motorists; and to set up a commission to look at market competitiveness and radical ways of cutting fuel taxes in the long term. There is an ethical case too. We must show that tax cutting is a moral creed. We must show that this is a Government for the many, not for the few; a Government who cut taxes for millions of British people, not just for millionaires. I urge the Government to listen to the 116 MPs who have signed the motion; to the 110,000 people who have signed the FairFuelUK e-petition; and to the many millions of families, small businesses and pensioners who are struggling with fuel costs. I urge the House to support the motion.

--- Later in debate ---

[Andrew Bingham]

If the hon. Gentleman had been paying attention, he would know that I said my constituent was an owner-operator with his own truck.

[Andrew Percy]

If that owner-operator did have employees, does my hon. Friend think that he would be happy with the six planned rises under Labour?

[Karl Turner]

What about VAT?

--- Later in debate ---

[Andrew Percy]

Does my hon. Friend think that those pretend employees would have been happy with the fact that the previous Labour Government escalated the fuel escalator?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. We cannot have shouting across the Chamber. It is absolutely unacceptable, Mr Turner. We will have proper debate.

--- Later in debate ---

[Toby Perkins (Chesterfield) (Lab)]

I congratulate the hon. Member for Harlow (Robert Halfon) on securing the debate, but I would like to express my disappointment, and the disappointment of the many dozens of people in Chesterfield who have written to me about this matter, that the motion demands so very little of the Government. It calls on them to “consider the effect” of fuel duty increases, to “examine ways of working” with industry, to “take account” of market competitiveness and to “consider the feasibility” of a price stabilisation mechanism. That is hardly a manifesto for change. Is that what 110,000 people wrote to Members of Parliament about? We are asking so very little of the Government today. Jesus said:

“Blessed are the meek: for they shall inherit the earth”,

and the hon. Gentleman must be very blessed indeed. His request to the Government will greatly disappoint the many people who have written to me.

I recognise entirely that the cost of fuel is just one of many costs that are going through the roof, resulting in many people in our constituencies really struggling at the moment. The cost of energy is a significant one, and the cost of food is going through the roof. Inflation is going up, wages are stagnant and the people in our constituencies are struggling desperately. I welcome the fact that Conservative Back Benchers are finally showing an understanding of the principle of the Government forgoing revenue in order to deliver economic growth, reducing the deficit through the higher tax revenues that result from people having more money in their pockets. It was exactly that principle that persuaded me to vote in favour of shelving the increase, when Conservative Members were not doing so. Having arrived at that point, however, it is bizarre that Conservative Members should think that the issue is purely about fuel, and that all the other reasons why people have no money in their pockets and why consumer confidence is so low are not significant. They focus solely on fuel.

This issue is having a massive impact on businesses. The hon. Member for Harlow started by saying that some businesses do not pay VAT, so they are okay. However, small businesses pay VAT, as do public services, charities and ordinary people out there who are paying it the whole time. The significance of this should not be underestimated. Over the past 15 years or so we have seen a reduction in the amount of tax on fuel as a percentage of its cost. The peak period of the highest tax on fuel was back in the mid-90s. Since then, we have seen a reduction. Over the course of the last few years, we have seen a massive increase in the cost of petrol. The tax has been significant, but the big increases recently stem from the profiteering of the fuel companies—[Interruption.] Is that an attempt to intervene? I was not inviting one, but I am happy to oblige.

[Andrew Percy]

The point I have been trying to make is what the hon. Gentleman might think of his Government’s decision to escalate the escalator and push through 12 rises. It is a bit difficult being patronised by a party that did all that to fuel prices.

[Toby Perkins]

The escalator was the invention of the previous Conservative Government. The reality is that when the major fuel protests broke out in 2000-01, the amount of their income that people were spending on fuel was far less than it is today. All the revenue is coming in now, and Conservative Members say that the Government were generating too little money in years gone by. They stand before us today with all the benefit of the money that has gone in over the years, yet for all the talk we hear from people such as the hon. Member for Brigg and Goole (Andrew Percy), we have a motion before us that asks the Government to consider whether they can do something. If the massive increase in fuel duty over the years is so awful—I think it has gone up a lot—why do we not have a proposal that is a bit stronger? Why is the motion so feeble? [Interruption.]

We have also heard from Conservative Members—[Interruption.] If they want to intervene, they can do so, but I will not just be barracked. According to Conservative Members, there is a huge amount of support for the 1p reduction, which will save motorists £274 over the Parliament. At the same time, people are spending £300 or £400 extra in VAT, so this does not add up. We need a stronger motion, so that we can really help to put some money back into people’s pockets.