Cost of Living

Baroness Primarolo Excerpts

Wednesday 16th May 2012 Commons Chamber

[Justine Greening]

I remember being in the Finance Bill debates last year, when the hon. Gentleman’s party voted against closing tax loopholes, which would really have strengthened our tax system. He knows full well that alongside reducing the top rate of income tax to 45%, which will help to stimulate entrepreneurship, we are closing loopholes, which will raise five times as much money from those very same people. We know that this sort of economic illiteracy that we are hearing yet again from the Labour party, which has no credible plan to tackle the deficit—its only plan is to spend more and borrow more—would mean that the economic credibility of the UK would collapse and interest rates would be likely to increase. Any business with a loan, any home owner with a mortgage and taxpayers funding the huge debt that Labour left our country would suffer the consequences, and that is not a path we plan to go down.

I shall briefly discuss some of the particular cost of living issues that hon. Members across the House have raised today. First, let me briefly address some of the challenges associated with rail fares. We know that keeping rail fares affordable is important, which is one of the reasons why we took action this year to limit the increase in regulated fares to 1% above inflation—[Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I apologise to the Secretary of State, but a lot of private conversations are taking place on both sides of the House and they are disturbing my ability at least, let alone that of hon. Members, to hear what she is saying. Perhaps people who want to have private conversations could go outside.

[Justine Greening]

Thank you very much, Madam Deputy Speaker. That was extremely helpful.

We have taken action to limit the rise in rail fares, but all in this House know that if we are really going to tackle the underlying reason why rail fares are pressured to go up year after year, we have to make the railway system that we inherited from Labour, which is costing us £3.5 billion a year more than it needs to, work more efficiently. That is the best way of bringing a long-term end to the era of inflation-busting increases in regulated fares.

I have to say that one of the most depressing things in this House is to hear Labour Members raise a whole load of problems but provide no solutions. Making the railway industry work more effectively together is another area where I have heard no solution from the hon. Member for Garston and Halewood (Maria Eagle). I recall that when I delivered my Command Paper oral statement she said, “I will be setting out our alternative shortly,” but she has never done so. I will not even talk about the response to the flex, because the Minister of State, Department for Transport, my right hon. Friend the Member for Chipping Barnet (Mrs Villiers), demolished the hon. Lady’s argument so comprehensively that there is no need to go over that, compounding injury with further insult. In addition, we are, of course, making huge investments in rail and road. Those things will not only tackle some of the challenges we face today, but will build our country for the future.

On fuel duty, my hon. Friend the Member for Rossendale and Darwen (Jake Berry) and my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) made vital points about why it is important that we make sure that motoring remains affordable, and about some of the pressures on motorists arising from the high cost of fuel. We have all seen the oil price go up across the world and how that has fed into the price of petrol at the pumps. It is one of the reasons why, last April, we cut fuel duty, why we scrapped Labour’s automatic fuel duty escalator and why we have postponed the planned rise this January to August, as well as cancelling the next planned increase. As a result of that action from the Chancellor we have eased the burden on motorists by £2.5 billion this year. In fact, over the coming two years it will add up to £4.5 billion in motorists’ pockets that otherwise, under the previous Government’s plans, would have been in Treasury coffers.