Fuel Prices

Caroline Nokes Excerpts

Tuesday 15th November 2011 Commons Chamber

[Caroline Nokes (Romsey and Southampton North) (Con)]

I congratulate my hon. Friend the Member for Harlow (Robert Halfon) on the persistence that enabled him to secure this important debate.

The issue that we are discussing does not affect only rural constituencies. I am very conscious that 75% of the constituents who have contacted me come from the more urban parts of the constituency. The truth is that everyone is affected by rising fuel prices. Nevertheless, a disproportionate burden has been placed on those who live in rural areas. In parts of my constituency, people have no choice but to use their cars. Those who live in remote rural villages travel, on average, 10,000 miles a year just to gain access to essential services. One constituent told me, “This is not about luxury. I leave home for work before the first bus arrives in the morning, and I return long after the last one has gone back to the depot.” He has no choice whatsoever.

However, it is not only those who use their cars for their own journeys who are affected. We should also consider those who act as volunteer drivers and support charities, an increasing number of whom tell me that they are finding it too expensive to continue to help the community in that way. We should be thinking about ways of supporting them. Although they welcome the increase in the Chancellor’s approved mileage allowance, they say it is becoming increasingly difficult for them to play their part in helping the local community and reducing the burden on the local councils that would otherwise foot the bill.

[John Hemming (Birmingham, Yardley) (LD)]

Does my hon. Friend agree that because of the greater scarcity of fossil fuels, we should be aware of the costs of energy generally and in the long term, not just the short term?

[Caroline Nokes]

Absolutely. I hope that I shall have time to mention that at the end of my speech.

This is not just of concern to middle-income families who may be running two cars; it is a huge cost for low-income families who spend proportionally more of their incomes on fuel.

[Nadine Dorries (Mid Bedfordshire) (Con)]

I am sure my hon. Friend agrees that some of those low-income families are trying to establish their own businesses, or are already running small businesses such as, in my constituency, landscape gardening businesses. Winter is coming, and those people will now have to deal with the increase in fuel prices as well.

[Caroline Nokes]

That is indeed of real concern.

It is little wonder that so many of our constituents signed the e-petition—more than 110,000 members of the public called for the debate—and little wonder that the focus has been on the proportion of taxation in the current average price of £1.34 a litre.

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

The hon. Lady is making a powerful speech. Could she make it even more powerful by saying that she would support a reversal of the increase in VAT on fuel?

[Caroline Nokes]

I am not convinced that that would be legal.

This morning I met representatives of the Freight Transport Association. They told me that high fuel prices have had a crippling effect on the logistics industry, whose business viability is determined by the price of fuel. Even the smallest rise makes a massive difference to them. A 5p increase in fuel duty adds another £2,350 to the annual price of running an articulated lorry, and the 3p increase that is planned for January would mean that a fleet of 50 vehicles would have to recover £37,000 more per year.

[Esther McVey (Wirral West) (Con)]

Will my hon. Friend give way?

[Caroline Nokes]

I am sorry, but I do not think I have time to do so.

Profit margins for hauliers are incredibly tight, which makes haulage a very vulnerable business. In particular, fuel companies are not willing to extend credit terms, with the result that some payments are shrinking to as little as three days’ worth. As haulage firms are often not paid for work for up to 60 days, this is very much a hand-to-mouth industry, and companies can afford to think only as far as January. That hinders growth, investment and further recruitment.

There are about 100 Freight Transport Association members in my constituency, which is, of course, close to a deep-sea port. Fuel duty is lower on the continent, and £1,000-worth of diesel purchased on the continent can give over 200 extra miles to the driver. That has led to European businesses becoming more competitive than their UK counterparts, further heightening the pressure on domestic hauliers.

I acknowledge that we are facing a very difficult economic situation, and that we need to take robust steps to tackle the deficit, and I also know that the planned rises are less than the previous Government had intended. It is a relief to constituents that the Government delayed the scheduled tax rises and have introduced a fuel stabiliser but, like others supporting this motion, I want us to have a stabilisation mechanism under which duty rises and falls in response to fluctuations in the underlying price of oil.

As I am a member of the Environmental Audit Committee, it would be wrong of me not to mention the impact motorists and hauliers have on our nation’s carbon footprint, but fuel taxation is a blunt instrument and the reality is that people in rural areas are having to bear the additional cost as they often have to make the same essential journeys as before.

There are alternatives to petrol and diesel that are more environmentally friendly. One of them is biodiesel, produced from used cooking oil. Over the last year, 99 million litres of used cooking oil was collected from restaurants, food manufacturers and caterers. It is an entirely sustainable fuel derived from a waste product and devoid of some of the negative impacts traditionally associated with biofuels. Therefore, if taxation on fuel is partly about encouraging behavioural change, rather than just being about revenue raising, the Government should encourage the use of this fuel, rather than see it as another target for increasing duty. The removal of the 20p per litre duty differential on this type of fuel, which is an excellent source of green energy, sends entirely the wrong message.

[Several hon. Members]

rose—