Fuel Prices and the Cost of Living

Charlie Elphicke Excerpts

Wednesday 16th March 2011 Commons Chamber

[Gemma Doyle]

My hon. Friend makes a significant point. I was about to say that a number of factors are adding up to put intense pressure on family incomes. For example, 1,000 families in my constituency will lose a further £400 a year as a result of the Government’s cuts to the child care element of the working tax credit. What makes that all so much worse is that while the Government are choking off help for hard-working families and recklessly cutting jobs and services, they have given the banks a huge tax cut this year. I know my constituents find it hard to understand how that can be squared with the Prime Minister’s claim that we are all in it together—a frankly laughable claim from a Cabinet of millionaires. [Interruption.] I am sorry if Government Members do not like to be reminded of how many millionaires are in the Cabinet, but I am afraid that that is a matter of fact.

The Government have heaped pain on families, but they could have made a different choice and relieved some of that pain. As my hon. Friend the Member for Wallasey (Ms Eagle) said, the Government could use the £800 million raised from the bank levy immediately to reverse the VAT rise on fuel. Just as the previous Government often postponed fuel duty rises when oil prices were rising, as they are now, the Chancellor should look again at the Budget—that is why he should be here today, listening to the arguments—ahead of the planned 1% rise in April.

[Charlie Elphicke]

Has the hon. Lady considered that the reason the Chancellor is not here today is that he is busy trying to sort out the Budget to undo the massive financial mess left by the Labour Government and deal with their economic incompetence?

[Gemma Doyle]

It is the duty of the Chancellor to listen to Members as he is putting together his Budget. Both he and the Chief Secretary to the Treasury should be present, listening to Members as we debate this important subject.

I have outlined a different approach, which would be the right approach. I notice that none of the Scottish National party MPs is present. Their proposal for a fuel duty cut in remote areas would do nothing to help my constituents in West Dunbartonshire. The name of the constituency may include the word “shire”, but on the whole it is not a rural area, although a small number of my constituents would consider themselves to be in a remote area. The majority of my constituents live in an urban or a suburban area and they are struggling with the record price of fuel. We need to go much further and bring down fuel costs for everyone in urban and rural areas.

I will of course support the motion in the name of the Leader of the Opposition. The Government can and must take action to provide some relief to people in my constituency and across the country. They can do this in the ways outlined today. Like numerous other Members, I urge the Chancellor to take that action and go some small way towards showing that he has not completely lost touch with the pain that British motorists are suffering.

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[Charlie Elphicke (Dover) (Con)]

It is a privilege and honour to follow the hon. Member for East Antrim (Sammy Wilson), who made an entertaining, engaging and thoughtful speech on this issue, which we all feel strongly about. It has been an emotional debate on both sides of the House. Constituents write to me daily expressing concern about the cost of living and how they will manage, given the way the cost of fuel has risen in recent times. It is a just concern that is understood on both sides of the House. Hauliers in my constituency write to me expressing grave concern about the situation they find themselves in and their ability to compete with operators on the continent who undercut them.

However, I must say that for the Opposition to bring forward such a motion is the most extraordinary and shameless opportunism I can recall seeing in this House. It is shameful because we know that the Labour party increased duty 12 times in its period in office. We know that it took away the 10p tax rate. We know that tax discs went through the roof, and we know that the haulage industry was decimated in the last decade because the Labour Government had no interest or desire to ensure that that industry was safeguarded.

[Chris Evans (Islwyn) (Lab/Co-op)]

Does the hon. Gentleman agree that the most damning verdict on the coalition’s first year in government was when someone wrote to me and said, “Mr Evans, thanks to the increase in VAT on fuel duty, I’m worse off than I was a year ago”? Does the hon. Gentleman agree that most people in this country are worse off than they were a year ago?

[Charlie Elphicke]

Measures taken by this Government will take 800,000 of the poorest people in the land out of tax. The Chancellor is not in his place today; I hope very much that he is working out how he can look after the least well-off people in this country in his Budget. I hope that he will be listening and thinking carefully about how he can engage with people’s understandable concern about the cost of fuel and how the country can be put right after 10 years of being driven into the international sidings.

[Elizabeth Truss (South West Norfolk) (Con)]

Does my hon. Friend agree that in his Budget the Chancellor should be looking at areas such as South West Norfolk, where people have little alternative but to use their cars both for business and domestic purposes? In particular, does he agree that the rural fuel reduction should be extended to areas such as Norfolk, where there is very little public transport?

[Charlie Elphicke]

My hon. Friend makes a powerful point on behalf of her constituents, for whom she is such a brilliant advocate. As she and I know, the difficulty is the amount of money in the kitty, which is massively in the red. We have a structural deficit of £109 billion and borrowings this year of more than £150 billion. That is the poisoned economic inheritance that the previous Government left, having maxed out the nation’s credit card and brought this country to the brink of bankruptcy. What do they urge us to do? Opportunistically, they urge us to cut taxes. How would they do that? They would borrow more money, as we know from the shadow Chancellor’s Bloomberg speech, and raise interest rates on mortgages for the average householder, who struggles to get by as it is.

[Sheila Gilmore]

Did the hon. Gentleman actually listen to what his hon. Friend the Economic Secretary to the Treasury said earlier about the impact of VAT rises and fuel cost rises on businesses? They mean that businesses go under, people are put out of work and they then buy less? Is that not the crux of the issue? If we want growth, we need to give people income with which to purchase things.

[Charlie Elphicke]

The crux of the issue is that we have to stop the draining of money from the public finances, right the nation’s finances and get this country growing with a pro-business agenda. That is what the Government are looking at, and I hope that in the Budget next week we will see a pro-growth, pro-business, pro-jobs and pro-money economic policy, which we have not had for the past decade. We have been brought to the brink of ruin by the amount of debt that the previous Government encouraged ordinary people to get into and, indeed, managed to get the public finances into. This Government are about putting those things right: ensuring that our housekeeping personally and as a nation is put back on the level. That is really important.

[Fiona O'Donnell]

Among all those tough choices, which does the hon. Gentleman think his Chancellor found tougher: taking money from his friends in the City and in the banks, or taking money from hard-working families in my constituency?

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[Charlie Elphicke]

I gently encourage the hon. Lady to be cautious when making remarks about rich people. The other day her right hon. Friend the Leader of the Opposition talked about how his house is worth millions and millions, so we should be careful before we start trading such ludicrous insults. This is a serious debate; we have people in our constituencies living in deprivation, and all she can do is trade political barbs. I encourage her to consider how we can create more jobs and money, and how we can grow the private sector, so that it includes real jobs and real money that will take this country forward and grow our economy. The priority has to be to ensure that this country gets back into the fast lane of economic growth in the international arena. We have been slipping down the global competitiveness league over the past 10 years, and we need to ensure that this country goes back to the head of the economic river.

[Pamela Nash]

Does the hon. Gentleman not agree that rapidly rising fuel prices are doing exactly the opposite of what he says his Government are trying to achieve, with economic growth and the number of jobs throughout the country decreasing?

[Charlie Elphicke]

I cannot control the weather; God controls that. Nor can I control world oil prices; they are controlled by the global markets. Would that we could just magic away the fact that global oil prices have risen, but we cannot, and global oil prices have been rising and creating the problem felt deeply by many of our constituents. The situation has not been helped by the past decade’s 12 rises in fuel duty, which saw it go up from 36p to 57p. That is a massive, 20p increase, and on top of that there is VAT. But, to come to this House and say, “Well, why don’t we just chop the VAT by 2.5%,” knowing that is illegal and unlawful, and that it would take six years to secure such a derogation, is a shameless and craven exercise in opportunism.

[Tom Blenkinsop]

The Government are proposing enterprise action zones, so if I were to set up a petrol station in one of them, would I be able to sell petrol exempt of all taxes? That would present a problem for the hon. Gentleman’s argument that, under EU law, we are not able to roll back VAT.

[Charlie Elphicke]

I do not think the Chancellor would introduce any such enterprise zone on that basis, and nor should he; that would be a ridiculous thing to do.

Just as ridiculous is the fact that the previous Government did so little about smuggling across the border. We see it daily in Dover, where local hauliers complain to me bitterly about the people who fill up in Luxembourg but not in the United Kingdom. They bring goods in, pick up another load, leave and then fill up again in Luxembourg. They contribute nothing to duty, road funds or vehicle excise duty in this country; they come on a free pass, and the previous Government did nothing about it.

[Dr William McCrea (South Antrim) (DUP)]

Does the hon. Gentleman understand the anger felt by law-abiding people in these days of great financial constraint about the fact that on Tuesday the UK’s biggest fuel laundering plant was found in Crossmaglen in Northern Ireland? That industrial-scale plant was capable of producing more than 30 million litres of illicit fuel a year, representing the equivalent of £20 million in lost revenue. Surely it is about time that such despicable action was stamped out.

[Charlie Elphicke]

I completely agree with the hon. Gentleman, who makes a very fair point. We need to be firmer and tougher on smuggling and ensure that everyone pays their fair share. Two hauliers in my constituency, Martin Husk, and Tony Thompson of Comfret, stopped me the other day in Dover, complaining bitterly about the way they are hobbled by international competition, and I said that we should look carefully at daily road-user pricing. That would need a European derogation, but all other countries seem able to do it. We should look at introducing that as a longer-term, well thought-out, non-opportunistic measure.

We need measures on fuel which are lawful and affordable. We cannot just prey on people’s fears and be cravenly opportunistic; we have to be considered and careful. We need the Government to continue carefully considering the policy for the Budget next week, and to bring forward something that is affordable, credible, sensible and well thought-out, not the sort of ludicrous opportunism that we have seen from the Opposition.