Fuel Prices

Jake Berry Excerpts

Thursday 13th September 2012 Commons Chamber

[Naomi Long (Belfast East) (Alliance)]

I am pleased to be able to participate in today’s debate on this important issue affecting all our constituents. From my perspective it is also timely, because recent reports have confirmed, again, that petrol and diesel prices in Northern Ireland are the highest in the UK and among the highest in Europe. The impact of this on Northern Ireland’s consumers, families and businesses is compounded by the fact that Northern Ireland has a greater dependence on road travel than other regions, because of its high level of rurality—35% compared with the 12% average for the rest of the UK as a whole—and restricted access to public transport outside urban centres. That factor was mentioned by the hon. Member for Devizes (Claire Perry).

The high prices have a significant impact on local households, on businesses and on our national competitiveness. In addition, high prices and high differentials in the level of duty on fuel between the Republic of Ireland and Northern Ireland, in particular, provide an additional incentive for fuel laundering, smuggling and stretching, which deny the Exchequer income and carry significant enforcement and policing costs. Therefore, having affordable and transparent fuel pricing is a vital component of tackling those issues.

On the impact on business and growth, I had the opportunity during the recess to meet representatives of the Freight Transport Association in Northern Ireland, and I was able again to hear at first hand about the detrimental impact that the high and rising cost of fuel is having on its members and on the wider economy. One plant hire company in my constituency told me that it was keen to expand its business and take on new staff, and could see opportunities for doing so even in this difficult economic climate, but the effect of inflated fuel prices on its business has meant that fuel has now overtaken wages as a proportion of business costs and that its ability to expand has been constrained.

[Jake Berry (Rossendale and Darwen) (Con)]

One of my constituents is following this debate and has just tweeted me to say that they spend £4,600 a year on diesel, £1,000 on insurance and £240 on road tax, so going to work costs them £5,840. She is considering giving up work because of the excessive price of fuel. The lady’s Twitter handle is “knot_weed”. Does the hon. Lady accept that that is difficult both for businesses and their employees?

[Naomi Long]

It is incredibly difficult and it is one of the stumbling blocks we will face as we try to get people out of unemployment and back into work. The cost of travel to work is a significant factor. In Northern Ireland, where the cost of car insurance is also higher than in the rest of the UK, the problem is further compounded.

I hope that the OFT investigation will particularly examine the elevated price of fuel in Northern Ireland and the reasons behind that, as it is hurting business and families, and it is hindering growth.

--- Later in debate ---

[Jake Berry (Rossendale and Darwen) (Con)]

I start by paying tribute to my hon. Friend the Member for Harlow (Robert Halfon) for securing the debate. It is my privilege to speak in it. I read his allegations in The Sun today about the manipulation of oil prices. A lot of us have been outraged by the alleged manipulation of LIBOR, but the manipulation of fuel prices will have much more of an effect on our constituents. They feel the pain that it causes every single week when they fill up their car.

I want to focus on the local market in my constituency of Rossendale and Darwen. I spoke about it last June and in my view it was then and remains a broken market. Rossendale is near the town of Bury and Darwen is near the town of Bolton, so, to provide a comparison, I visited petrol stations in both places. At its peak, there was a 5p difference in fuel costs between Bury and Rossendale and between Bolton and Darwen. Rossendale and Darwen are both ribbon developments, like so many of the Lancashire industrial towns along the river valley, so someone who lives in either place is forced to commute long distances because of the nature of our community.

At this point, I want to pay special tribute to my local paper, the Rossendale Free Press—I hope it will publicise this speech, of course. With me, earlier this summer, it launched a “Rip off at the pumps” campaign. This is a positive example I can give to colleagues of where they can lead and affect the price of petrol or diesel in their own patch. We took the price at our local Tesco and compared it with the price at the Asda in Bury, and, as I said, there was a 5p difference. We called on people who lived locally not to buy their fuel at Tesco until that price was brought down. I personally met representatives of Tesco here in Westminster and asked how they arrived at that price. They told me that they drew a 3 mile geographical line around the Tesco store in Rawtenstall and used prices in that area as a comparison and basis for theirs, but what they did not say was that the only other major petrol retailer with which they were comparing their prices was also Tesco. They were both fixing and making the price in one market, which is why I think that the market is broken.

Earlier today, I checked the price difference again following the campaign run by me and the Rossendale Free Press. Petrol in Asda is Pilsworth is now £1.37.7 a litre, whereas at the Tesco in Rawtenstall it is £1.37.9. We have taken the difference down from 5p to less than half a pence. That is something positive that we can all do as Members of this House. We should not suffer discrimination at our petrol pumps for living in a rural community and we should do something about it. I hope that by running their own “Rip off at the pumps” campaigns, hon. Members can bring prices down in their area.

[Jason McCartney (Colne Valley) (Con)]

Will my hon. Friend give way?

[Jake Berry]

I am sorry, but I will not.

The Government have taken action. People who have to put fuel in their van to go to work or in their car to go to school feel the squeeze at the pumps and I pay tribute to my right hon. Friend the Chancellor for freezing the fuel duty rise and saving everyone 10p a litre, putting the fuel back in our economy so that people can go to work.