Fuel Prices and the Cost of Living

Debate between Angela Eagle and Alan Reid

Wednesday 16th March 2011 Commons Chamber

[Ms Eagle]

I was trying to help hon. Members by giving way. Obviously, that extends the time that one’s remarks take, but I think that some exchange helps the debate.

I hoped that the Chief Secretary would be here today, but we have the Economic Secretary instead. Why will the Chief Secretary not turn up to one of his own debates? Where is he? Why has he not come to tell us about what he has been doing on all those issues?

[Mr Alan Reid (Argyll and Bute) (LD)]

The hon. Lady will recall that when she was a Treasury Minister, she received a delegation of highlands and islands Members of Parliament, including the Chief Secretary, and that we asked for a fuel duty derogation for remote rural areas. We had tea and sympathy, but no action. The Chief Secretary is now implementing that policy. Does the Labour party now support reduced fuel duty for the islands?

[Ms Eagle]

We want to do something that helps everyone in the country, not one third of 1%.

As we all know, VAT applies to petrol. As I said , the Library has calculated that the 2.5% increase in VAT has added nearly 3p to the cost of a litre of petrol when people are least able to absorb that extra cost. We all know that an extra fuel duty increase of 1p above inflation is factored into the Chancellor’s Budget arithmetic and due to be implemented next month. Taken with rising inflation, those changes could put 5p a litre on to fuel duty rates. The combination of sharp rises in world oil prices, ongoing uncertainty in the middle east and the self-inflicted rise in VAT is creating real hardship for many people. It causes higher inflation, lowers consumer spending power, which is already weak, and reduces both consumer and business confidence, thereby putting any prospect of growth at risk. The economy shrank by a shock 0.6% in the last quarter of 2010. People are getting increasingly desperate for some relief from the Conservative Government, but there is precious little sign of it.