Fuel Duty

Debate between Ben Gummer and Susan Elan Jones

Monday 12th November 2012 Commons Chamber

[Ben Gummer]

At least FairFuelUK sticks to its position. My point is that Labour put up fuel duty in government when the country was in a deep recession and increased it by marginally less when the country was showing signs of a credit-fuelled recovery—coincidentally, on the eve of an election—yet now, when there has been 1% growth in GDP, Labour objects to an increase in fuel duty that was programmed at that point by the previous Government. What Labour lacks in consistency it also lacks in remembrance of what it did previously, faced with the worst recession this country has ever suffered, when the Labour Government put duel duty up by 6p over 18 months.

[Susan Elan Jones (Clwyd South) (Lab)]

The hon. Gentleman speaks of remembrance, yet he seems to have forgotten the rise in VAT. Will he say how that impacted on fuel duty and how it affected his constituents?

[Ben Gummer]

I shall turn to disposable incomes and the cost of living in the round now, as it is mentioned in the motion. Of course times are incredibly difficult, for my constituents and most of our constituents. The cost of living and disposable incomes have come under considerable pressure, but a large part of that has resulted from the need to balance the books. We were left the largest deficit in peacetime history, which—as the Minister reminded us—we now understand was £71 billion before the recession came. Yet the inheritance was not just one of deficit in 2008, but one where real wages fell in the period from 2003 to 2008, when GDP figures showed at least nominal growth—of 11% perhaps —in the economy. Real wages for anyone who happened to be a middle-income earner stagnated in that period, while real wages for those in the bottom quartile fell by 0.4%. Therefore, when the country was growing under the previous Administration, incomes were falling for the vast majority of people in real terms.

The reason we now have to take painful steps to rebalance the economy is to address the fundamental problems that the previous Government not only failed to address, but in many instances laid the foundations for. This country cannot survive on the economic model built by a previous Chancellor of the Exchequer and leader of this nation. It was that model which broke so spectacularly in 2008, and it is this model which we are trying, little by little, to repair. The least the Opposition could do is recognise the problems that they gave this new coalition Government to sort out, yet we have before us a motion that is a consummate exploration of inconsistency and hypocrisy. What I would say to those on the Government Front Bench is this: do not listen to the Opposition when they give lectures on tax avoidance or fuel duty, because they have none to give.

I suggest that we have a system that will not work in the long term. The problem with fuel taxation is that—as the Office for Budget Responsibility has probably underestimated—it will cost the Exchequer some £13 billion by 2026. Fuel taxation is a system that has been modified so many times to allow for low-emission vehicles, heavy goods vehicles and rural drivers that it is becoming a sieve for the Exchequer, and it needs fundamental reform. I would push Ministers to think seriously again about road tolling, so that we can stop this silly exercise, which we now have year in, year out, of deciding whether to put up taxes—decisions that are often completely countermanded the next day or within a week by volatile rises and drops in the price of oil—and moreover allow ourselves to manage the vast assets that we have in the road infrastructure in this country. At the moment, there is no demand management and complete resource misallocation in maintenance and investment, all of which could be remedied by a sensible road tolling system, which would help us to target help specifically at those constituents whom many in this Chamber will talk about this evening.

We have before us an inconsistent and hypocritical motion—a motion that tells us nothing, apart from the fact that Her Majesty’s Opposition are a long way from forming Her Majesty’s Government. I therefore commend the amendment, which my hon. Friend the Economic Secretary has moved, and, in so doing, hope that he will look again at road tolling, so that we can stop this perennial debate once and for all.