Fuel Duty

Bill Esterson Excerpts

Monday 12th November 2012 Commons Chamber

[Sajid Javid]

My hon. Friend makes himself absolutely clear. He has been an avid campaigner on this issue, and his point of view is certainly being taken on board.

These low interest rates have helped hard-working families up and down the country with their cost of living. With interest rates low, mortgage bills are also low. If interest rates rose by just 1%, average mortgage bills would increase by almost £1,000 a year.

[Bill Esterson (Sefton Central) (Lab)]

The hon. Member for Brigg and Goole (Andrew Percy) said that his constituents want the planned rise in fuel duty to be cancelled—as do my constituents—and the Minister said that he agreed with him, so why does he not support our motion?

[Sajid Javid]

If the hon. Gentleman is patient he will hear about the action we have taken to help with the cost of living.

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[Sajid Javid]

I thank the hon. Gentleman for that question; I will come on to it.

[Bill Esterson]

It would be great if the Minister spoke to the fuel duty motion—[Interruption.] The fuel duty part of the motion. He talks about tax avoidance. Many of my constituents used to work at HMRC—they do not any more because his Government got rid of them. How can he be serious about tax avoidance when he has not provided the new inspectors he promised and has cut some of the staff who were there when the Government took office?

[Sajid Javid]

The motion mentions tax avoidance—he really should read his own party’s motion. The number of HMRC employees went down from 96,000 to 66,000 under his Government.

Labour Members had 13 years to clamp down more widely on tax avoidance. They had 13 years to do what they are calling for today. Did they take that chance? No. There were 13 years of inaction, and a consultation gathering dust in the Treasury archives. Even then, their figures simply do not add up. They claim that clamping down on this tax relief would bring in £650 million, but figures released while they were in power show it would bring in significantly less. If they ever want to regain credibility on the economy, they need to apologise for the mess in which they left the economy and learn to stop making irresponsible, unfunded promises.

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[Ben Gummer]

I thank the hon. Lady for her comment, because it helps me to remind her that, when Britain was in recession at the back end of 2008, fuel duty went up by 2p. When it was in recession at the beginning of 2009, fuel duty went up by 2p. When it was in recession in September 2009, fuel duty went up by 2p. When there was a faltering recovery—which was probably credit fuelled—in March 2010, on the eve of an election, at the point when the figures showed that the economy was recovering, fuel duty went up by 1p. So much for the correlation between recession and fuel duty increases.

[Bill Esterson]

rose—

[Mr Deputy Speaker]

Order. Those who think they are bottom of the list will also have minutes removed.

[Bill Esterson]

I am always happy to be guided by you, Mr Deputy Speaker. I wonder whether the hon. Gentleman is aware of the research—

[Sajid Javid]

Reading!

[Bill Esterson]

Thank you. I wonder whether the hon. Member for Ipswich (Ben Gummer) is aware of the research by FairFuelUK that points out that a 3p increase in duty would deliver a 0.1% drop in GDP and the loss of 35,000 jobs. Does he accept those figures?

[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.

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[Christopher Pincher (Tamworth) (Con)]

It is a pleasure to follow the hon. Member for Airdrie and Shotts (Pamela Nash). I gently point out to her that there are twice as many Government Back Benchers here tonight than Labour Back Benchers, and that is for an Opposition day debate, but we will let that one lie.

It is great pleasure to participate in this debate, and I congratulate the Opposition on tabling this motion, because it gives us all an opportunity to stand back and admire the brazen brass neck, the unbridled cynicism and the naked opportunism that characterises it. It seems that the shadow Chancellor is almost congenitally unable to stand and watch a bandwagon pass by without having the urge to jump aboard it. However, it seems that he has been overtaken with uncharacteristic modesty this evening, because he is not here; he has fallen silent. For the past few days he has been beating his chest, beating the drum and complaining about fuel duty increases, but now, this evening, he has donned the mantle of the mute. A week after Guy Fawkes night, he has lit the blue touch paper and withdrawn to a safe distance, leaving his ciphers and his sidekicks to propose and support his motion—and well he might, because we have heard a chorus of amnesia from Labour Members. We have heard them speak forgetting all they have done in the past, forgetting what they are saying while they are saying it and forgetting everything they have said when they have sat down. But we will not forget: we will not forget the meagre 75p increase in pensions; we will not forget the 12 hikes in fuel duty; and we will not forget the increase in fuel poverty between 2004 and 2009. I want to touch on that issue, because during Labour’s tenure—

[Bill Esterson]

According to the House of Commons Library, the proportion of a litre of fuel paid in tax rose from 59% to 75% between 1990 and 1997, whereas between 1997 and 2010 it fell back to 65%. Does the hon. Gentleman accept those figures?

[Christopher Pincher]

All I will confirm is that fuel duty would have increased many more times had Labour’s Budget been implemented and that 2.8 million more people fell into fuel poverty between 2004 and 2010 as a result of the policies that the Labour Government pursued. The fact of the matter is that energy prices went up on the watch of the Leader of the Opposition, when he was Secretary of State—that is all he did; he stood there and watched as millions more people fell into fuel poverty.

I am pleased to say that in my constituency fuel poverty has fallen by 5% in the past year or so, and we estimate that by 2020 it will have fallen by about 25%. Thanks to the Government introducing and increasing the cold weather payments, and thanks to the discount of about £120 a year that will help 600,000 vulnerable pensioners, these people will be better off. The Government are helping them, but it is not enough. If we try to stick sticking plaster over a problem such as fuel poverty, we will not resolve it. That is like treating pneumonia with Angiers junior aspirin. What we really need to do is get to the actual causes of fuel poverty. In the 10 years between 2000 and 2010, under the previous Labour Government, £25 billion was spent on trying to alleviate fuel poverty yet the increases in fuel prices swamped those measures. Now, three quarters of those who live in the most energy-inefficient homes are in fuel poverty compared with one in 20 of those living in the most energy-efficient.

If we are serious about dealing with the problem of fuel poverty and dealing with one of the greatest challenges in the cost of living, we need to get a grip on the demand side of the equation. That means ensuring that homes are properly insulated. Not only that, but they should have proper and modern boilers and smart meters so that people can for the first time take control of their energy demands and reduce them. That is what the green deal is all about.

We need also to deal with the supply side of the energy equation. A generation ago, there were 15 energy suppliers, but that number has now reduced to just six. A generation ago, energy bills were relatively straightforward but now people are confused by an array of tariffs. A generation ago, 75% of people rarely if ever switched their energy suppliers. That is still the case. If we are serious about dealing with one of the biggest challenges and biggest drains on people’s means, we need to deal with energy costs.

I hope that the Government’s proposals in the draft Energy Bill, to which I look forward, will ensure that people are put on the best and cheapest tariffs and that we invest in new nuclear and shale gas, which Labour left behind for 10 years, so that we secure our energy supply and are not exposed to international gas and hydrocarbon volatility, which has caused so much distress to bill payers over the past 10 years. The Government must also be careful in that Bill, because although we need to ensure that we have a sufficient, resilient and diverse supply of energy, we must ensure that the mechanism to deliver that capacity does not place undue burdens on the industry that will deliver it.

The industry reckons that the capacity mechanism could increase its costs, which it could pass on, by anywhere between £3 billion and £13 billion, meaning that anywhere north of £14 a year could be added to energy bills. We need to ensure that the Energy Bill does not have the perverse effect of adding to energy bills as it tries to reduce them. I hope that the Minister will pass on that message to his colleagues in the Department of Energy and Climate Change.

For the moment, let us thank the Labour party for tabling the motion and enjoy the theatre of the absurd. It is an absurd prospect: the Labour party introduced the fuel duty escalator, increased fuel duty and wanted to hike it again if it won the last election, but it is now proposing to freeze fuel duty by closing the tax loopholes that its own labyrinthine Treasury policies allowed. I am sure that the Chancellor is aware of the cost to the country of fuel duty, but I think that the country is also aware of the cost to it of the previous Labour Government—a grisly experiment that it will not want to repeat.

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[Bill Esterson (Sefton Central) (Lab)]

As the hon. Member for Mid Bedfordshire (Nadine Dorries) is gathering votes from Government Members as we sit here, we find out that she lasted only five minutes of a bush tucker trial. Meanwhile, back in the real world, her constituents and mine are suffering grievously because of the cuts in living standards that have resulted from the Conservative party’s economic policies. The real struggle of many of our constituents stands in stark contrast to her outrageous behaviour. The impact of fuel prices is one of many worries that have brought living standards under attack. I wonder how many people out there in the country think it is appropriate for a Member of this House to be away for five weeks—

[Christopher Pincher]

Like Gordon Brown.

[Bill Esterson]

And that is when the country faces the toughest economic situation of modern times—[Interruption.] Goodness knows what the hon. Lady’s constituents think, but what of her colleagues? Judging by their reaction to what I have just said, they clearly approve. They have all said that they want to scrap the fuel duty rise, but they will not vote for it. Maybe they should all be in Australia cheering on Nadine, rather than rejecting efforts to help all our constituents.

There are many pressures on living standards and a lot of money has been taken out of the economy, affecting businesses and jobs and delivering hardship for many people in this country. As I have said, it is extraordinary that Government Members will not vote for a measure that would do exactly what they all say they support.

Let me say a little about some of my constituents—the pensioners, working families, young people out of work and commuters—all of whom will be hit by the Government’s failure to cancel the fuel duty rise. Pensioners, some of whom have to choose between heating and eating, face increased food prices and, at the same time, will have to pay more for bus and taxi fares or, if they have a car—some pensioners do—they will find it very expensive to run. It is no wonder we are seeing more and more people relying on food banks. The Government tell pensioners to deal with rising energy costs by going on the internet and looking at uSwitch, but my pensioners tell me that most of them have never used a computer, let alone the internet, and so would not know where to start. How is that a solution to rising energy costs and falling living standards? You tell me, Madam Deputy Speaker, or perhaps the Minister can tell me when he winds up the debate. That is before the granny tax has taken money from pensioners to pay for tax cuts for millionaires. Then there was the young man whose building firm was wound up because he and his partner could not get any work. He now works in a shop for £6.50 an hour and barely has enough money coming in to put food on the table and pay the rent, let alone put fuel in his car.

The least we could do is to make some kind of move to help these people by cancelling the fuel tax increase. As I said in an earlier intervention, and as FairFuelUK has demonstrated, its effect would be a fall in GDP and a loss of 35,000 jobs, so no jobs would be created for the more than 1 million young people who are out of work. At the same time, the tax credit cuts will hit part-time workers, and that is where jobs are being created. Part-time jobs have increased, but not the full-time ones that would help to build prosperity. Many small businesses tell me that they are getting by with fewer staff who are working longer hours. HGV owner-drivers tell me that the cost of filling their lorries has gone up and up, and all those increased fuel costs have to be passed on, either through cuts in their own income or price rises that hit the living standards of those on the lowest incomes. VAT is up, fuel prices are up, food prices are up, energy prices are up, and taxes are up—except, of course, for those millionaires.

Tonight we, as the House of Commons, have an opportunity to vote to cancel the fuel duty rise, not least because of the impact that it would have in the coldest part of the year when people rely on fuel for their cars more than at any other time. The Government have an opportunity, if they choose, to do this by closing tax avoidance loopholes and targeting the Starbucks, Amazons and Googles of this world, thereby helping those whose living standards have suffered.