Fuel Duty

Debate between Fiona O'Donnell and John Redwood

Monday 12th November 2012 Commons Chamber

[Mr John Redwood (Wokingham) (Con)]

The Opposition are right to highlight the issue of the cost of living, and it is timely that we are having a debate about the pressures on it. It is particularly timely that we are having a debate about the pressures that the outgoing Labour Government imposed on the cost of living, which still remain. I am thinking of the hidden increases in petrol duty, and all the other measures that they left in place or that were needed if we were to try to combat the deficit.

There is no doubt that the squeeze on people’s real living standards has been very severe in the last four years. It was most severe under Labour during its slump, but it has continued under the coalition Government. One of the reasons for the intensity of that squeeze on real incomes is the fact that price inflation has remained obstinately high, partly as a result of indirect taxation and partly, as the Minister said, as a result of world pressures on commodity markets.

I find myself unable to support the motion, which may come as no surprise to any Member on either side of the House. I consider it to be defective in two important ways. First, I do not think that a temporary three-month freeze will solve the problem. A double whammy in April, which is what Labour proposes, could be even worse, because people will not have become used to the rising fuel price that was inherent in the Labour plans.

[Fiona O’Donnell]

The right hon. Gentleman suggests that three months do not constitute a long period, but they will be three months of cold weather, during which people will be having to cope with an increase of up to 11% in their energy bills. The three-month freeze would make a difference.

[Mr Redwood]

I am all in favour of lowering energy bills, although that is probably a topic for another day and another debate. I have made many suggestions to the Government, all of which I think Labour would find unpalatable. I have, for instance, suggested possible methods of making gas much cheaper, thus reducing prices for all our constituents and affecting real incomes in a way that would please me, but is not often favoured by my party.

I think that the first part of the motion is flawed because what it proposes would not solve the underlying problem, namely, the tax increases left by the outgoing Government, but I am not very happy with the second part either. The Minister said that he did not think the Opposition had done their sums properly before proposing the measure to deal with tax avoidance, which they say would pay for the temporary lower duty rate. It was interesting to hear from him that the Labour Government had considered a scheme relating to travel costs, but had decided that it would be unwise to pursue it. We do not know whether they made that decision because of the impact that it would have on people or because it would not bring in enough revenue, but it appears from what the Minister said that there was an issue involving the amount of revenue that it would raise. For those two reasons—it would not solve the duty problem, and the numbers do not add up—I think that it would be unwise for the House to support the motion.

As for the coalition Government’s amendment, I find myself particularly in agreement with the final words, in which we are asked to welcome

“the Government’s commitment to do more to help with the cost of living in future”.

I was interested to hear the Minister not only say that he understood the points that many of my right hon. and hon. Friends had been making about the level of fuel duties, but imply that action might be forthcoming in the autumn statement and the subsequent Budget statement to tackle that or related problems. I shall be happy if the Government tackle the over-burden of taxation in a variety of ways. I do not think that we need be too prescriptive tonight. We know that an autumn statement is coming up, and we know that there will be a Budget statement after that. However, I want to address my few remarks in this short debate to the issue of what the commitment to do more to help people in the future might amount to in those two important statements of Government policy.

The first point that I hope the Government will grasp is that this country’s problem is not that it is undertaxed. If we look at the budgets and the state of the national finances, we see that there is every sign that successive Governments have tried to increase the tax burden substantially to keep pace with accelerating current public spending. I think that we have now reached the point of no return—the point of saturation. The high rate of income tax introduced by Labour has led to a big fall in income tax receipts at the top level, which is not very surprising—and which, of course, is of no interest to Labour Members. They had their little jibe about millionaires, but they should be asking themselves what tax rate will cause rich people to make the maximum contribution to filling the massive financial hole in which we find ourselves.

We are well above that rate now, as the figures clearly indicate. I think that the Government will find that their higher rate of capital gains tax also collects rather less revenue than before, or than they would like, and that fuel duties, while probably still contributing some increment to taxation, are not creating as big an increment as they would like either, as people simply cannot afford all the fuel that they used to buy because the duties are so high.

We know that more than 60% of the pump price—and the price of petrol and diesel in this country is currently very high—goes, in one form or another, to the UK Government. Of course, part of the rest of the price goes in taxes to other Governments so that they can produce the fuel in the first place. A massive amount of tax is being taken by the British Government directly, along with the 60%-plus that is taken by them indirectly through the tax on oil companies, and by foreign Governments in their taxation on the oil. The motorist is seen as an easy target for huge amounts of tax in an attempt to meet the bills. I hope that, when considering ways of easing the cost of living, the Government will bear in mind that motorists and business drivers—people who are trying to power the economic recovery—are incurring very large bills through this particular tax.

I think that all Members agree with two propositions about the economy. First, we would like it to grow faster, and secondly we would like to make big cuts in public spending by getting people back to work, so that they can earn more in jobs than they can receive in out-of-work benefits. Those are the aims that the Government must pursue. They have told us that they wish to make work more worth while. It is now clear that the economy has had a good job generation capability in the private sector over the last couple of years or so, and that is very welcome. However, we now need to ensure that we can reduce public spending by getting many more people into jobs, so that they require less benefit support, and we need to do that partly by cutting tax rates, so that we can collect more revenue in a friendlier way.

There is no doubt that we have tax saturation, and the Government need to take that on board for the purposes of the autumn statement and the Budget. We should reject the rather foolish motion, which was never going to ensnare many Conservatives—Labour will have to get better at ensnaring Conservatives, if that is its game—and support, and ensure that the Government deliver on, their proposal to do more about the cost of living, because that is a very real issue which worries many of our constituents.

Fisheries

Debate between Fiona O'Donnell and John Redwood

Tuesday 15th November 2011 Commons Chamber

[Fiona O’Donnell]

Getting it right also requires political leadership, which has been sadly lacking from the Minister on this matter. What we have instead is more uncertainty and delay for the fishing sector, which is not welcome.

Food security has not featured heavily in the debate, so I want to take the opportunity to mention it. In Europe we are eating more fish than ever before. We have hit an historic peak and the projections for the next 30 years show that consumption will continue to rise. With the EU already importing two thirds of its fish and growing demand in big markets such as the US and China, the reforms must address the issue. I hope that the Minister will address that when he comes to the Dispatch Box.

Reform is long overdue, as all Members have said—it is one concern that unites the House. That is the hope, but as ever the devil will be in the detail and in how strongly the Government argue and negotiate for UK fisheries and use regionalisation to respond to the needs of fishing communities. We support the reform process and stress the need for a strong voice for the interests of UK fisheries and a clear move away from the top-down management and control that pervades the current CFP.

I have no hesitation in acknowledging the hard work and commitment of the Minister in engaging with the devolved Governments and with stakeholders. It is essential that the UK has the strongest possible voice in these negotiations. I read yesterday that the Secretary of State is bending over backwards in representing the interests of the UK in reform of the common agricultural policy, but where is she on CFP reform? Can the Minister assure the House that the Secretary of State is fully engaged and will perform similar political contortions to get the best possible deal for the UK on fisheries reform? It would also be helpful if he put more flesh on the bones of his negotiating position. Four months on from the publication of the Commission’s proposals, does he have a clear view of what he wants to come out of CFP reform, which of the proposals he agrees with, and which he wants to strengthen? I am aware that the impact assessment closed only last Thursday, but can he update us on its progress? Any information would be welcome.

I would like to turn to some of the key areas of the reforms set out by the Commission. Regionalisation is a key element of the new CFP, as the hon. Member for Tiverton and Honiton (Neil Parish) and my hon. Friend the Member for Great Grimsby (Austin Mitchell) mentioned. The current top-down approach has failed to achieve its objectives. Radical reform is necessary. The new CFP must ensure that fisheries management is dealt with at the most appropriate level. Without genuine decentralisation of fisheries management, it is difficult to imagine that sustainable management will be achieved. To that end, I welcome the proposals for multi-annual plans devised by member states, which the Commission intends as a central tool for ensuring that fish stocks are kept at sustainable levels and achieve maximum sustainable yields. It is vital that the Minister works closely with stakeholders in that process.

The collaborative approach will be particularly important in the plans to eliminate discards under the basic regulation within the multi-annual plans. In some EU fisheries 60% of catches are discarded. Discarding is a symptom of the poor management and practice of the current CFP. Much of the focus of the current proposals is on landing all catches of the main commercial species, but there is a real danger that discards overboard will become discards ashore.

[Mr John Redwood (Wokingham) (Con)]

Given that all previous Governments have not wanted that policy but failed to get rid of it, does the shadow Minister have any idea how the Minister will be able to do so?

[Fiona O’Donnell]

I am sure that the Minister will be glad to answer that question, but I will say that what we are seeing now is a phased-in approach on three levels, which gives us a real opportunity. I share concerns that Members have voiced in the debate on how we can achieve that, but that is not an excuse for a lack of political leadership in achieving the aim.

The Commission’s proposals place a legal duty on the UK to implement a tradeable system of quotas, known as transferrable fishing concessions, which some Members have touched on. They have raised concerns in other debates and argued that we should not end up with a situation in which a vast share of our concessions is in the hands of a few and multinational organisations can buy up the rights to our national resource. There is a proposal that member states should maintain an accurate register of holders of transferrable fishing concessions. Does the Minister support and welcome those plans for transparency, and what preparatory plans and assessments have been undertaken by his Department? Has he come to a view on the transfer of concessions to other member states?

My hon. Friend the Member for North Tyneside (Mrs Glindon) spoke about reaching maximum sustainable yield, and like her I have concerns about how we achieve that, given the nature of our mixed fisheries. The scale of the challenge must not again be an excuse for a lack of political will from the Government in driving forward to achieve maximum sustainable yields wherever possible by 2015. Ensuring that decisions are based on the best possible data and scientific advice requires Government agencies and the Government to work with fishermen, and as the hon. Member for Banff and Buchan (Dr Whiteford) mentioned, there is good practice in the pilots in Scotland to build on.

I am pleased that my hon. Friend the Member for Great Grimsby mentioned external waters. It is proposed that fishing partnership agreements will be replaced with sustainable fisheries agreements, which will put more emphasis on achieving the aims of the CFP outside EU waters. I welcome the new legal framework introduced by the Commission to ensure that European fishermen fish responsibly, but there is another concern relating to employment rights—perhaps not the Government’s strongest cause—which I would like to raise with the Minister. We know that on EU vessels there are many workers from developing countries and there is concern about their employment rights.