Fuel Prices and the Cost of Living

Claire Perry Excerpts

Wednesday 16th March 2011 Commons Chamber

[Brandon Lewis]

rose—

[Claire Perry (Devizes) (Con)]

rose—

[Matthew Hancock (West Suffolk) (Con)]

rose—

--- Later in debate ---

[Ms Eagle]

No. I have given way a few times, and I am going to get on with my remarks.

It is absolutely clear that increased fuel duty costs are eating further and further into already stretched household budgets, making the squeeze on living standards even worse. Businesses are suffering from problems caused by inflating commodity costs, tighter margins and restricted access to credit from the banks. Many are anxious about how they will get by in the next few years, and the continuing rise in the price of fuel is adding to that worry.

[Claire Perry]

Will the hon. Lady give way?

[Ms Eagle]

I will get on with my remarks and give way to the hon. Lady shortly.

The cost of oil has been rising on world markets as a result of underlying increases in demand from Asia and uncertainty because of the unrest in the middle east. Just a week ago, petrol prices hit a new high at the pumps. The average price for unleaded fuel is, a week later, still £1.32 a litre. That means that the cost of fuel has risen 7p a litre since the beginning of the year. The AA pointed out that the £6 gallon has arrived for the first time, and that prices for diesel have soared even higher, currently averaging £1.38 a litre.

--- Later in debate ---

[Claire Perry (Devizes) (Con)]

It is always a pleasure to follow the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). I represent a large, rural constituency in Wiltshire, and when I filled up my car on Monday morning, I found that we, too, are paying £1.40 for diesel and £1.35 for unleaded fuel. The point was very well made by the hon. Member for Bristol West (Stephen Williams) that once one gets out of London and the major metropolitan areas there is a real problem with competition. That problem is shared by many constituencies across the UK.

I am afraid that the Labour motion is breathtakingly cynical. Not one Labour Member bothered to show up at the recent debate on this issue in Westminster Hall, and the Labour Government consistently penalised motorists across the country for 13 years, with unused bus lanes, underinvestment in rural transport and 12 rises in fuel duty over 13 years, of which four were in the last 16 months of their term of office. They also planned, as part of their scorched earth economic policy before the election, six further rises to come into effect over four years, so their cynicism in presenting this motion is breathtaking.

[Julie Hilling]

The hon. Lady is very keen to talk about what the previous Labour Government did, but does she want to think a little about what is happening now? The Road Haulage Association says that in the last week alone £850 was added to the cost per year of running an average-sized lorry—that was under her Government’s watch.

[Claire Perry]

I am grateful for the hon. Lady’s intervention and I will come to my “demand” for something to be done about this problem. I think we both have in our constituencies small haulage businesses that are really suffering from the increases in fuel prices.

I find the motion muddled and inaccurate. This is yet another unfunded spending commitment from the shadow Chancellor and the Opposition. We cannot use a one-off levy of £800 million to fund a permanent reduction in VAT costing several times that amount. The maths just does not add up. I had always thought that the shadow Chancellor, who is not in his place, was a fairly financially literate fellow.

[Andrew Bingham]

Is my hon. Friend aware that this is the 10th spending pledge that Labour has made from this banking levy? It has spent that money 10 times—is that not typical of the overspending and double-counting of its years in government, which got us into this mess in the first place?

[Claire Perry]

My hon. Friend makes an excellent point. The shadow Chancellor’s predecessor referred to a financial primer that he felt he should read. Might I suggest that the current shadow Chancellor should borrow a copy? I would be delighted to lend him my calculator because I think that a financially literate Opposition would be a quality Opposition and one that the country would welcome.

I find this muddled and inaccurate motion extremely worrying because it is illegal. The EU directive on VAT states:

“Member States may apply either one or two reduced rates…The reduced rates shall apply only to supplies of goods or services in the categories set out in Annex III”,

but annex III does not list road fuel and other amending articles do not permit a reduced rate or an exemption to be applied to transport fuel. Even if we wanted to do this—if the motion were passed—it would be impossible. This is yet another inaccurate attempt to create a political narrative that joins words such as “bankers”, “tax” and “too far too fast”, but does nothing to address the fundamental problem that the Labour Government left, which we are having to clear up. I do not know about you, Mr Deputy Speaker, but people in my constituency are sick to death of this political posturing and narrative.

[Sheila Gilmore]

Will the hon. Lady give way?

[Claire Perry]

I am afraid that I will not at the moment.

The motion is a sham attempt to create dividing lines when we should be working together to get the country growing and out of this mess. It is cynical, muddled and inaccurate, but, as in all our debates on this issue, I welcome the chance to speak about these matters. Outside London, in many parts of rural Britain, people use their cars. Some 43% of households in London do not own or have access to a car, whereas the figure for my constituency is only 15%. That is not because it is a wealthy constituency—the average income in Devizes is well below the national average—but because in large parts of rural Britain people must have a car to go about their everyday business, to get to their job, to take their children to school and to carry out normal day-to-day activities. It is a necessity.

[Sarah Newton (Truro and Falmouth) (Con)]

A car is also a necessity for families in Cornwall. Does my hon. Friend agree that the prices are much higher in such areas? In my constituency, the cost of diesel is almost 6p a litre higher than here in London.

[Claire Perry]

My hon. Friend makes a very good point, which many Members across the House who represent rural constituencies will recognise. Devizes has one of the lowest population densities per hectare of all English constituencies. We have real problems with our road services and thanks to the very misguided policies of the Labour party our rural services were hollowed out. We lost a third of our post offices and, shockingly, all the minor injuries units in the constituency, so people have to use their car to access even the most basic services.

Like many Opposition Members, I am calling on the Chancellor to bring to fruition some of the plans that we all talked about before the election. I do not underestimate the difficulty of introducing a unilateral fair fuel stabiliser, which would be a tricky thing to do. Unlike the Opposition’s proposals, however, it would be legal, and it would be extremely welcome to many Members on both sides of the House and their constituents.