Fuel Prices

Jason McCartney Excerpts

Thursday 13th September 2012 Commons Chamber

[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.

--- Later in debate ---

[Martin Vickers (Cleethorpes) (Con)]

I am not sure whether I can match the excitement generated by the Minister but, in concluding this debate, I, too, join in the congratulations to my hon. Friend the Member for Harlow (Robert Halfon), who has certainly made his name—he is now known nationwide as “Mr Fair Fuel”. It is a pleasure to serve as his deputy on the all-party group on fair fuel for motorists and hauliers.

This has been a good debate, with every speaker highlighting the impact on their constituents. Without doubt, the cost of living is, along with the other economic issues of jobs and growth, the No. 1 concern of our constituents. There is a widespread view that the tax and duty on petrol is way too high, and that it is unfair, particularly as it falls disproportionately on hard-working families, especially in rural areas, as has frequently been mentioned. People know that the Government are particularly keen to help and support them and, having heard the Minister’s comments, I am confident that that is the case. As my hon. Friend the Member for Camborne and Redruth (George Eustice) and others have said, the Government are particularly alert to the problems affecting hard-working families. It has been said numerous times but it cannot be said too often that petrol is 10p a litre cheaper now than it would have been had the Chancellor not acted.

It is worth mentioning that in my constituency many hundreds of people work in the oil industry at the refineries in Immingham and along the Humber bank, and the industry is vital to the local economy. Nevertheless, the public remain understandably cynical about, and suspicious of, what they see: vast profits; volatility in markets; and the results of falls in oil prices not being quite as dramatic as those of increases. My hon. Friend the Member for Rossendale and Darwen (Jake Berry) referred to a broken market, and my constituents, who live within walking distance of a refinery and often find that they get a better deal by driving many miles to save a few pence a litre, can testify to that.

It is a long time—14 years, I believe—since the OFT last investigated the sector, and I thank the Petrol Retailers Association for bringing that to my attention. Clearly, another investigation is urgently needed. As my hon. Friend the Member for Harlow has pointed out on a number of occasions, other G20 nations are taking regulatory action and we need to ask ourselves why we are so far behind. While we push for a full investigation, I also want to give my support to the call for evidence. I encourage, as the Minister did, all Members to submit evidence.

Our constituents rightly expect the discrepancies in costs that flow from oilfields and platforms to be immediately reflected at the pump. While we are seeking the how and why, what should concern us more than anything—we have heard evidence of this in the debate—is the burden that this cost places on the average person and on the average business, and on their ability to contribute positively to the economy.

[Jason McCartney]

As one of the signatories to the motion, I praise my hon. Friend the Member for Harlow (Robert Halfon) for securing the debate. Does my hon. Friend the Member for Cleethorpes (Martin Vickers) agree with me, and with many of our fair fuel and petrol price campaigners, that Governments can do nothing more at the moment to help hard-pressed families, commuters and small businesses than cutting fuel duty and that oil companies can do nothing more to support our economy at this tough time than acting fairly and transparently in the way they price their products?

[Martin Vickers]

I agree entirely. My hon. Friend, as always, gets right to the heart of the matter.

My hon. Friend the Member for Mid Norfolk (George Freeman) gave a particularly good analysis of the impact on rural economies. As other hon. Members have said, many of our constituents in rural areas now have to drive much further to fill up as a result of the drastic reduction in the number of petrol forecourts, particularly in the independent sector. It is worth pointing out that we should not blame the independent operators. They are local businessmen seeking to make a decent living. These fuel prices are affecting the average person every day of their lives in a negative way. The more that goes in tax, the less there is to spend and boost the local economy. I was pleased to hear the Minister speak about being robust and that he is not reluctant to take further action and would be prepared to revisit the many issues raised if new evidence is brought forward, which is encouraging.

We have had an exceptionally good debate. The root cause of the problem might be market manipulation, and it might not. Despite allegations one way or the other, our constituents deserve the real answers. In summary, I fully support the OFT’s moves so far but believe that, along with the FSA, a full, independent and transparent investigation is needed. As I have said, the unfair price of fuel at the pumps is not the fault of the independent forecourts, which have seen high rates of closure over the years; it is possibly the outcome of price fixing by the people involved in the oil market. Our country cannot survive these continued price hikes. They damage individuals and business. It is good to see cross-party support for the motion.

Question put and agreed to.

Resolved,

That this House notes the call for evidence by the Office of Fair Trading (OFT) on competition in the UK petrol and diesel market; however, believes that the OFT and Financial Services Authority should launch a full investigation into oil firms active in the UK; calls on the Government to consider the emergency steps being taken in other G20 countries to reduce fuel prices; notes, for example, the announcement by President Obama to strengthen federal supervision of the US oil market and to increase penalties for market manipulation, and the move by Germany and Austria to establish a new oil regulator with a remit to help stabilise the price of petrol in those countries; and further urges the OFT to note that the Federal Cartel Office in Germany is now investigating oil firms who are active in the UK following allegations of price fixing.