Fuel Prices and the Cost of Living

Caroline Lucas Excerpts

Wednesday 16th March 2011 Commons Chamber

[Ms Eagle]

I am pleased that the competition authorities have launched an investigation into what has been going on with heating oil. My hon. Friend is right to point out that transport in rural areas is a particular issue.

People who are already financially stretched by this Government’s slash-and-burn approach now find themselves trying to cope with sudden sharp increases in the price of essentials such as food, energy and fuel. Recent OECD figures put UK food inflation at 6.3%. That is higher than the consumer prices index, higher than the retail prices index, and higher than in most of the rest of Europe. In my constituency, parents are now worried about the rising cost of providing balanced meals for their children.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Does the hon. Lady agree that the fuel duty escalator is an important tool to send a clear message that oil prices are going to have to continue to rise, not only for geopolitical reasons but because of peak oil and climate change, and that a way of ensuring that the poorest are not hardest hit would be to scrap the recent VAT increase in totality and replace it with a crackdown on things such as tax evasion and tax avoidance?

[Ms Eagle]

The hon. Lady is right that there has to be a balance between the environmental aspects of taxes on fuel and living standards. However, I find, all too often, that on the green side of the argument the social justice aspects of imposing environmental tax rises are not thought about enough, and such measures tend to hit hardest people whom we are least able to help. She needs to help all of us, when we are thinking about this, by bearing in mind the effects on poverty of environmental taxes.

--- Later in debate ---

[Justine Greening]

I am sure the hon. Gentleman was quite happy trotting through the Aye Lobby when his party brought forward its 12 fuel duty rises and the Budget in which it announced a further six. His question is particularly disingenuous because at that time the Conservative party was campaigning against unreasonable and unfair rises in such things as road tax. The Labour party paid no attention and continued to hammer motorists again and again.

[Caroline Lucas]

rose—

[Justine Greening]

Perhaps I will make a bit of progress, because I know that many Members want to take part in the debate.

--- Later in debate ---

[Justine Greening]

I shall make a bit more progress, because I want to talk about the Labour party’s so-called fuel duty proposals, which are of course VAT proposals.

We are increasing child tax credits above the rate of inflation, giving lower-earning families an extra £210 over the next two years. Of course, poorer families will still receive more in child credits than they received under the previous Government, and, as I said, lower earners will be better off as a result of this Government’s changes to the personal allowance.

[Caroline Lucas]

Will the Minister explain how it is compatible for a Government who claim to be the greenest ever to duck this opportunity to introduce a shift to green taxation—in other words, to keep the fuel duty escalator but to reduce other taxes accordingly?

[Justine Greening]

The hon. Lady’s point is about how to strike the balance between achieving environmental change and managing to raise revenues for the Exchequer to fund public services, which I am sure she agrees need the right level of funding. I think we have got the balance right in our approach to fuel duty and VAT on fuel. The challenge is that if we do not go ahead with the previous Government’s increases, we could fundamentally damage our ability to tackle the deficit. This Government are constrained purely because of the terrible financial situation that the previous Labour Government handed over to us.