Fuel Duty

Harriet Cross Excerpts

Wednesday 18th March 2026 Commons Chamber

[Harriet Cross (Gordon and Buchan) (Con)]

My right hon. Friend is making a great speech, as we always expect from him. Does he remember that, for the 2024 Budget, the Chancellor stood there and said that increasing fuel duty would be the wrong choice for working people? She said then that that was because of uncertain global events, and that the cost of living remained high. Does my right hon. Friend remember anything changing between 2024 and now? I do not think that the position has got any better—does he?

[Mr Holden]

My hon. Friend is entirely right. She is also a real champion for the North sea oil and gas sector, which is largely based in her constituency.

What are we seeing on top of those taxes on railcards, ferries and airlines—through increased airline business rates—and, obviously, the 50% hike in bus fares? What else is Labour up to? Well, the Government have been talking quite a lot about something called “simpler fares.” What they are actually doing is cutting out the cheaper fares preferred by passengers and replacing them with more expensive ones. That has been confirmed, in a letter to me, by none other than the Secretary of State for Transport, who I note is not present today. She says:

“Some passengers may pay more under this new structure but will gain”

—perhaps—

“more flexibility for their return journey”.

Well, my constituent Mr Nottage, of Ramsden Bellhouse near Billericay, has been quite perturbed about having to pay an extra 10%, and he is having to pay an extra fiver a year for his senior railcard as well. That hardly suggests that rail prices have been frozen under Labour. In fact, rail prices are going up for working people across the country.

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[Harriet Cross]

Yesterday, the Chancellor said it was great that Norway and Canada were increasing their production of oil and gas, and congratulated them doing so. And who could disagree with that—other than, seemingly, herself and the Cabinet? Does the Minister agree that, along the same lines, we should be increasing our production from the North sea and lifting the ban on North sea licences?

[Torsten Bell]

As I have said, oil and gas will be with us for some time. [Interruption.] Let me finish. That is why the Chancellor met the sector. [Interruption.] I hear all the chuntering from Opposition Members, but I did not hear as much chuntering when we saw a 70% fall in jobs in the North sea on their watch. [Interruption.] That is the truth of what you delivered. Now, on top of that, you are trying to double down. The Conservative party is doubling down on opposing investment in renewable energy, threatening those jobs. The Labour party believes in domestic energy security delivered by a range of sources, including the nuclear that the Conservatives failed to invest in.

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[Harriet Cross (Gordon and Buchan) (Con)]

It is great to be able to speak today in this important debate. I am glad that this is one of the topics that the official Opposition, led by the Leader of the Opposition, have brought to the House, because fuel duty impacts everybody. It impacts every family, every household, every business, hauliers—everywhere we go, everything that we see is impacted by fuel duty, and that is no more obvious than in rural areas.

People in our rural communities rely on cars more than anywhere else. We cannot rely on buses, because they are not reliable. We cannot rely on trains, because half of the time they are not there. We cannot rely on tubes, because we do not have any near us. Cars are the lifeblood of rural communities. We would be stuck without them, and therefore they are vital. The majority of the public know that too. There are 36 million petrol and diesel vehicles in the UK, and every single one of them will be taxed when fuel duty goes up. Fuel duty is a tax on every single vehicle, and all those vehicles are driven by somebody, so this is a tax on everybody.

Rural communities will feel this change so much more because they are so much larger. The best way to demonstrate that is to compare the size of constituencies. My constituency in Aberdeenshire in north-east Scotland is large; it is nowhere near the largest Scottish constituency, but it covers 2,076 sq km. That is larger than the combined total of the constituencies of Treasury and Transport Ministers multiplied by three. Indeed, if the large constituency of the Under-Secretary of State for Transport, the hon. Member for Selby (Keir Mather), is removed from that equation, the total combined constituency area of the Treasury and Transport ministerial teams is 380 sq km. I assume, therefore, that it is no coincidence that they do not appreciate how important cars are for getting around large constituencies and how much increasing fuel duty will impact rural constituents.

While distance is important, price is also vital. The “Fuel Finder” tool that has been created is helpful, not least because it tells me that in my constituency fuel is on average 147p per litre, compared with 139p per litre in the constituency of the Parliamentary Secretary to the Treasury. We are already paying more in rural constituencies, and we already have to drive our cars further, so we are filling up our cars more often and at a higher price. Fuel duty rises impact us more than those living in urban areas.

This is a point I keep coming back to, but rural communities do not have a choice—we have to drive. We have to drive to get to work, to get children to school, to go to doctors appointments. To use an example, my constituency has seen many bank closures, meaning that constituents in Ellon have to drive to Inverurie in order to bank. That is a 28-mile round trip—just to bank. That distance is further than the breadth of many Members’ constituencies, east to west or north to south.

It is not just fuel duty that the Government are targeting. At the Budget they announced their new 3p per mile charge for electric vehicles. Constituents of mine who live in Huntly and commute to Aberdeen to work, often in the oil and gas sector, travel 17,800 miles a year—based on their working five days a week, 46 weeks a year—just to get to work. The pay-per-mile system that the Government have brought in will mean that those constituents pay £535 a year just to get to work in their electric car. Perhaps Treasury Ministers cannot imagine having to do a 77-mile round trip to get to work, but that is what my constituents do and they are being penalised for it.

When the Treasury Front Bencher winds up, I would be grateful for confirmation that pay-per-mile for electric vehicles will not be a gateway to pay-per-mile for petrol and diesel vehicles. That would cripple rural communities, rural families, and rural businesses. It is a slippery slope that the Government have started on with EVs, and if the system progresses to cover petrol and diesel vehicles, it will be a hell of a lot worse for a lot of people.

We all know that supply is just as important as price, if not more important; we have been talking about it a huge amount since the events in Iran. People panic when they get to the pumps because they see the price going up, but they will panic more if they get to the pumps and there is no supply at all. I am not saying that we are there at the moment, but we need to consider how important supply is.

[Joe Robertson (Isle of Wight East) (Con)]

My hon. Friend is giving a characteristically well-informed speech. Might she reflect on the cost of moving around by car for the Prime Minister in his Holborn and St Pancras constituency and the necessity to move around by car for his constituents compared with mine in the Isle of Wight and hers in Gordon and Buchan?

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[Harriet Cross]

Absolutely; I think a lot of us can relate to the fact that in some constituencies people have no choice but to use their car. They will use their car and keep using it, because they have to, and if they are using their car, they need to fill it. Therefore, they need petrol and diesel at affordable prices, and increasing fuel duty is making that less affordable. Fuel duty makes up 38% of the cost of a litre of petrol. The wholesale price is 33%, which feeds into it, so any increase in fuel duty makes prices more and more expensive. The decision to do that is completely under the control of this Government.

Refining is a vital part of the production of petrol and diesel for our vehicles. The UK has a very good record on refining, as we are net exporters of petrol from our refineries, but in the last two years alone, two refineries—a third of the UK’s refineries—have been lost, and our capacity is going down. That is not least because of the carbon tax, which has nearly doubled under this Government. It has made refining in the UK more difficult, putting industries under pressure and ensuring that the de-industrialisation of the UK under this Labour Government continues.

Members need not look any further than the oil and gas sector, particularly in north-east Scotland, to see the de-industrialisation of the UK in action. The coherence of this Government’s oil and gas policy is non-existent. They know that we need oil and gas for years to come, and they say that we need oil and gas for years to come, yet they do not want British oil and gas for years to come. We have the largest tax on any mature basin, which this Government extended and increased in their first Budget. They have banned new licences, meaning that reserves will be left under the North sea. Norway will then drill those reserves, and we will import from Norway. There is no coherence in their strategy.

As a result of the ban on new licences, we are also exporting jobs. The skilled workers in the oil and gas sector who produce our oil and gas and contribute to our fuel security will move abroad. They have the skills and are valued workers, yet other countries value them more than we do in this country. The Government’s policies show that. One thousand jobs a month are being lost, and billions in tax revenue is being lost. Billions in investment is being lost, which I know the Treasury Front-Bench team know very well following their recent meetings with the sector. The Government—either because of their own ideology or the one being imposed on them by the Secretary of State for Energy Security and Net Zero—do not want to use our own natural resources. They would prefer to import, at huge financial and environmental cost and at the cost of work and jobs, in order to satisfy themselves that they are reaching a target that they imposed on themselves.

Some 70% of the UK’s energy still comes from oil and gas, and it will do so for many years to come. Electricity, which is the power that the Government refer to in their 2030 target, makes up only 20% of our energy. In reality, the vast majority of the energy that keeps this country going and powers the UK comes from oil and gas. Some 50% of the gas that we use every day comes from the North sea. Shutting down the North sea impacts our fuel security instantly and into the future, and it will keep doing so.

There are enough reserves in the North sea with the correct fiscal and regulatory conditions to support British energy security, but this Government have decided that they do not want them and would prefer to source oil and gas from elsewhere. We heard that yesterday from the Chancellor herself, who was delighted that Norway and Canada have increased production. Why would we not do the same? We can do the same. Why are we still waiting for Rosebank and Jackdaw to be approved? Why are we sitting on those applications? It makes no sense. All of these decisions affect our fuel security and the cost of living for households. They affect the amount of supply we have for all the things that we use energy for, yet this Government are happy to forgo that just for their headline.

I am delighted that we are discussing fuel duty for our rural communities and businesses, but this debate also shines a light on the vital importance of our oil and gas supply into our refineries and our cars and vehicles. That is why I am delighted to support the Opposition’s motion today.

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[Dave Doogan]

I am very happy to explain that to the hon. Lady when I get to that element of my speech, which I will in due course.

The other thing that really irritates me about this Government is the way that they talk about the just transition. They say, “We will be using fossil fuels for another 50 years, and we will be producing them in the United Kingdom”, as though they hold all the levers. Let me explain something to Members on the Government Front Bench: if they continue to apply Labour’s atrophying interventions in the North sea oil and gas sector, the industry, which is global—I do not know whether that is news to Ministers—will go somewhere where it can make a living and a profit and does not have some sort of nefarious Government taxing it out of existence.

The specific 5p fuel duty referred to in the motion, is regressive—that much is pretty clear—and iniquitous. It is particularly iniquitous to people who live in parts of these islands that are more remote, such as my constituency. I see that the hon. Member for Gordon and Buchan (Harriet Cross) is back in the Chamber. She detailed that her constituency is 2,076 sq km. This is not a competition, but Angus and Perthshire Glens is 5,525 sq km and 166% larger than her constituency, actually.

[Harriet Cross]

I thank my constituency neighbour—almost—for giving way. Although my constituency might not be the biggest, it is definitely the prettiest.

[Dave Doogan]

This is where I practise respectful disagreement.

For rural areas such as my constituency, the constituency of the hon. Member for Gordon and Buchan, and many other places across all four nations, this issue is really challenging. There is not limited access to public transport in many places such as ours; there is no access to public transport in any meaningful sense. Remote areas get a lot more winter, and the people there tend to work in more agricultural professions. They tend to drive larger, heavier vehicles that are more fuel-hungry, so they will end up paying more. Deliveries have to come from further away, and that all gets added to the cost. Of course, all that adds to the cost to councils of delivering public services. The public services delivered in constituencies such as mine are very much more expensive to deliver than those in Holborn and St Pancras.

It is on that point that we need to see how much harder this issue will impact on people in rural areas. I have looked at the “Fuel Finder” app. At the BP petrol station at the bottom of Montrose before crossing the river, the price of a litre of petrol is 149.9p. If I go to the BP petrol station over at Vauxhall Bridge Road, the price of a litre of petrol is 5p cheaper. People in Scotland are already paying a premium that people in London and the south-east do not pay on their fuel, and the 5p that the Labour party wants to apply will come on top of that.

The UK rate of oil consumption for heating is 4.9%. In Angus and Perthshire Glens, the rate is 13%. Some 6,101 households heat their homes with oil. Oil has gone up sometimes by 150%, so a £300 to £400 delivery is getting on for £1,000. There are also punitive requirements for the volume that people get delivered. A further 2,000 people in my constituency are on tankered gas. That must not be forgotten in this cost spike crisis, which, as I said, I predicted at the Chancellor’s spring statement.

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[Dan Tomlinson]

My hon. Friend is right: the Opposition are totally on the wrong side of common-sense public opinion in this country. On the most important of tests, they have failed. He is also right to point out that the fuel duty increase is pencilled in for September, as the Chancellor set out in last year’s Budget. I think it is worth reminding the House that fuel duty right now is lower than it was in 12 of the 14 years of the Conservative Government. In 2010, 2011, 2012 and all the way up to 2022, fuel duty was higher than it is now.

In the 2025 Budget, we extended the temporary 5p per litre cut in fuel duty until the end of August this year, and we cancelled the inflation-linked increase that had been planned for 2026-27. Taken together with decisions made since the 2024 Budget, the Government’s fuel duty freeze will save the average motorist more than £90 compared with the plans that we inherited. Conservative Members, who have made contributions in this debate, stood in the July 2024 general election on spending plans that would have had fuel duty increase by 5p—[Interruption.] Yes, it is true.

Unless the Conservatives are disowning the official forecasts that were published before the general election and the manifesto on which they stood—which, by the way, did not mention plans for fuel duty—I think we are again discovering that there were further black holes in the Conservatives’ spending plans. Their plans, which were set out in the official forecast in the run-up to the general election, said that fuel duty would increase by 5p last year—by RPI last year—and then by RPI again this year. We have instead chosen to freeze fuel duty both last year and this year and to maintain the 5p cut until September of this year.

The Liberal Democrat spokesperson, the hon. Member for Westmorland and Lonsdale (Tim Farron), and other Members made very important points about the impact of fuel price increases on those in rural communities. He will be aware, as I believe it applies to his constituency and to some of the others mentioned today, of the rural fuel duty relief scheme, which does provide a reduction to motorists in those parts of the country that are more rural. As I said in a Westminster Hall debate, which some in this Chamber attended, I am always happy to receive representations on whether that scheme should be widened.

The hon. Member for Gordon and Buchan (Harriet Cross) asked about the electric vehicle excise duty change that will be introduced in the coming years, and whether it will be extended. No, it will not. The plan is as set out at the Budget last year. Government Members think that it is fair that all vehicles that contribute to the wear and tear on our roads should also contribute towards the repair costs and to the public finances, and they will do so at a lower rate of 3p rather than 6p, which was the average amount paid by those who pay fuel duty.

[Harriet Cross]

Just for clarification, my point was that that is a pay-per-mile scheme and that the pay-per-mile basis would not be extended to petrol and diesel cars. Is the charge per mile on EVs a gateway for that extending to petrol and diesel vehicles?

[Dan Tomlinson]

The EVED charge is on electric cars because they do not pay fuel duty. Petrol cars do pay fuel duty, which, because it is on a litre of petrol, is a charge that is determined by how much someone drives.

The hon. Member for Brighton Pavilion (Siân Berry) made some good points about public transport. I congratulate her on getting through the speech after the very large number of interventions that she had to respond to—and she responded to them well. I point out that this Government are introducing the first rail fares freeze in 30 years and that we are investing £38 million to roll out 319 new zero emission buses across England—lots of good things.

As ever, decisions on taxation will be taken at the appropriate time, based on the best evidence and with careful regard to the public finances. The Government will continue to take the right decisions, protecting the public finances and supporting families with the cost of living.

The previous Government left us with the worst living standards stagnation in memory. A Reform Government would crash the economy just like Liz Truss did, with wild unfunded promises. The Greens would push up energy bills by blocking clean power. This Government reject the chaos offered by Opposition parties. We have an economic plan that is the right one for Britain. Our plan means that we are more prepared for this shock than otherwise, with borrowing falling by 1% of GDP last year, our power supply now less reliant on the gas rollercoaster, living standards rising, inflation falling, and the big and right decision to take £117 off annual energy bills in April yet to come. It is the right plan, and this Government will stick to it for the good of the British people and this great country that we all serve.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.