Fuel Costs

Rory Stewart Excerpts

Monday 7th February 2011 Commons Chamber

[George Freeman]

We can debate that another day.

The hon. Gentleman and his colleagues spoke eloquently about the needs of the rural economy, and I know that he will want to send his best wishes to one of the most exciting businesses in Norfolk, the English Whisky Co., which is doing great trade. As in so many debates, most of the suggestions that he and his colleagues made would lead to an increase in expenditure by the Exchequer, and, representing an English constituency, I find myself thinking, “English tax for Scottish voters.” His points on the rural economy were good ones, however, and I want to touch on the impact of fuel prices on that economy and offer some thoughts on how the Government might like to tackle the issue.

Fuel costs hit rural areas particularly hard, not only in Scotland but in England and Wales. In my constituency, where I am lucky enough to have four towns, 110 villages and a 130 mile boundary, the rurality is extreme. Fuel currently costs 130p a litre, which means that the average family are paying £70-odd to fill up their car. That is not a matter to be taken lightly. Families are hit particularly hard, especially those on low incomes who, it has been pointed out, tend to drive older, less efficient cars. Another group that is hit hard by high fuel costs is one by which the coalition has set so much store—namely, the people who are working hard to get out of welfare and into work. Small businesses are also affected, especially those in remote rural areas. They are crucial to the revitalisation of the rural economy.

The public sector is also affected by fuel costs. Many rural councils are hit very hard by their dependence on fuel, and this is another area in which rural councils in England have received particularly unfair treatment. Farmers are also hard hit, especially those growing commodity crops such as sugar beet and potatoes that require long-distance haulage. Hauliers are affected too, especially smaller, self-employed hauliers, who tell me that they are hit by the unfairness of the lack of a level playing field on which to compete with their European competitors.

[Rory Stewart (Penrith and The Border) (Con)]

May I make a plea to my hon. Friend to include a mention of dairy and livestock farmers, as they are also hit very hard by fuel prices in Cumbria?

[George Freeman]

My hon. Friend makes an excellent point.

On the wider economy, fuel inflation in rural areas not only affects rural communities but hinders our national economic growth. This goes to the heart of two of the coalition’s laudable objectives: the rebalancing of the economy and promotion of economic growth outside the City of London and our main metropolitan centres; and the attempts to help those sectors of the economy that do more than operate in the service, retail and housing industries—namely, the sectors that make things, transport things and sell things. Those sectors are hit particularly hard and we need to do all that we can to help them.

The reality that those on the Opposition Benches—particularly the Labour Benches—do not want to face is the fact that we have inherited a chronic legacy in our public finances that is costing £120 million a day in interest, which represents £20,000 of debt for every man, woman and child in the country. If we had not tackled the debt crisis, the interest payments would have been heading towards £70 billion a year. I repeat these figures because they need repeating to those on the Labour Benches. It ill behoves a serious party of government to come to the House, as those on the Labour Front Bench did today, and show no recognition of its part in causing this fiscal crisis. Labour Members have made no serious analysis of the rural economy and rural communities—[Interruption.] I wish that they would listen to what I am saying, rather than talking over it. They had no positive suggestions for how we might tackle the problem.

Fuel inflation risks strangling the economic recovery in our most marginal rural communities, but we cannot afford to do what we would like to do to address that. I therefore urge the Government, in accepting the constraints under which they are operating, to look carefully at the options.