Fuel Duty

Peter Aldous Excerpts

Monday 12th November 2012 Commons Chamber

[Peter Aldous (Waveney) (Con)]

It is a pleasure to follow the hon. Member for Plymouth, Moor View (Alison Seabeck) who, like me, represents a periphery constituency. It is appropriate that we are having this debate now, less than a month before the Chancellor delivers his autumn statement on 5 December, when I expect him to set out his strategy on fuel duty, at least for the short to medium term. It is important, in deciding whether to proceed with the planned 3p increase in January, that he should be fully aware of the impact that fuel duty increases have on hard-pressed families and on businesses, particularly small and medium-sized enterprises. It is a concern that my constituents very much emphasise to me both in conversation and in correspondence.

Fuel duty is a highly regressive form of taxation that hits those on low and fixed incomes particularly hard. Those in isolated, more remote periphery locations such as East Anglia and my Waveney constituency feel the impact hardest. The car there is very much a necessity and not a luxury. In Waveney, the average monthly distance to travel to work is just over 400 miles, while in Kensington and Chelsea, where salaries are dramatically higher and where there is a far better public transport system, it is just under 210 miles.

I am acutely aware of the dilemma of those constituents who travel to work from, say, Lowestoft to Norwich—a round trip of 50 miles every day. At the moment, their commuting costs are biting savagely into their weekly budgets. Moreover, there are jobs in the leisure, tourism and care sectors where the hours of work are such that using public transport is no option whatsoever.

I am very much aware of the excellent campaigning work carried out by FairFuelUK, championed by my hon. Friend the Member for Harlow (Robert Halfon). As well as highlighting the crippling impact of fuel duty on households and businesses, it backed up its case with hard evidence. Its most recent research, carried out by the National Institute of Economic and Social Research, shows that if the 3p rise goes ahead, 35,000 jobs will be placed at risk, growth will be cut by 0.1% and 40% less tax revenue than the Government had predicted will be raised. In the weeks leading up to 5 December, it is important that the Government look at this evidence very carefully.

Over the past two and a half years, the Government have pursued the right course for the British economy. There is no such place as a safe harbour in the world today, but they have taken us out of the eye of the storm. Interest rates remain low; there has been no run on the pound; and the markets are looking at other countries that have failed to put their houses in order. Plenty of obstacles remain ahead: the ongoing crisis in the eurozone; rising food prices as a result of poor harvests around the globe; and fluctuating oil prices, which have the potential to stall the recovery.

There is a concern, too, that anti-competitive practices in the petrol trade are distorting the market. It has been suggested that £30 a barrel is added through speculation. This results in consumers not paying a fair price at the pumps. It is vital that the UK economy is not exposed to such unfair profiteering. I urge the Government to ensure that the oil market is fully transparent and that a suitable supervisory framework is in place, with increased fines for market manipulation.

While it is right that we are having this debate tonight, there are fundamental flaws in the Opposition motion. First, the Government have a proven track record of listening and of understanding the impact of fuel duty on families and businesses. They have already delayed and cancelled increases that the previous Administration put in place. Fuel is 10p a litre cheaper than it would otherwise have been, while the Government’s policies in this area have delivered savings to families of £159 a year.

Secondly, the feedback from FairFuelUK’s meeting with my right hon. Friend the Chief Secretary to the Treasury suggests that the Treasury is studying seriously the report produced and presented to it. I get the impression that its findings are being carefully considered and will be taken fully into account in the autumn statement.

Finally, I fear that the Opposition’s means of paying for this postponement do not stand up to scrutiny. The Government have already secured many of the savings that can be achieved through successful clamping down on tax evasion and avoidance. I fear there is nothing much left there.

I shall oppose the Opposition motion and support the amendment. In doing so, I say that the time to scrap the increase in fuel duty is in the autumn statement on 5 December. I urge the Government to do so at that time.