VAT on Air Ambulance Fuel Payments

Rory Stewart Excerpts

Wednesday 11th July 2012 Commons Chamber

[Mark Pawsey]

I shall support the motion, but I am putting to the House the contrary view, which is about the unique nature of our air ambulance services.

On the basis of the quote I have just read out, we should applaud the sense of public duty displayed by the air ambulance that covers the area I represent.

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

I warmly applaud the idea that there should be a strong focus on charitable fundraising, but the challenge we in Cumbria face is that the North West Air Ambulance is attempting to fundraise in exactly the same areas as the Great North Air Ambulance. They are both presenting themselves as the sole Cumbrian provider. We therefore have paid fundraisers fighting on the doorsteps, as it were, to get contributions from Cumbria’s very small population of 500,000 people. Does my hon. Friend agree that we will need a more disciplined approach to fundraising if these wonderful institutions are to flourish and survive?

[Mark Pawsey]

I accept that point of view. There needs to be some control. We do not want one air ambulance to be competing with another for what we all accept are limited funds. That takes us back to my point about co-operation and interoperability. There may be a case for interoperability not only between air ambulances, but between air ambulances and other emergency services.

Those who support the charitable structure are concerned that it is not very many steps from a grant to offset VAT on fuel to the full nationalisation of the service, and the absorption of air ambulances into the ambulance service more generally. There might be some hon. Members in the Chamber for whom that would be a desirable move, but I believe that it would materially change the unique basis on which the service is delivered. It was interesting that it fell to the right hon. Member for Wentworth and Dearne (John Healey) to describe the air ambulance as probably one of the best examples of the big society.

There are other ways besides a VAT exemption in which the air ambulance can effect substantial savings. I argued in the Westminster Hall debate about the need for air ambulances and other emergency services to share assets. Earlier this week, I spoke at a Royal United Services Institute conference on the future operations of blue-light air assets. RUSI has produced research papers drawing attention to the fact that there is no co-ordination of air assets at this stage nationally or across agencies. If we investigate asset sharing we could effect savings that would be significantly in excess of the amount of savings that could be produced by reducing the costs of fuel.

[Rory Stewart]

On that specific point, one challenge we face in Cumbria is that mountain rescue finds it easy to co-ordinate with the police and the RAF, particularly when Sea Kings are involved, but very difficult to co-ordinate with air ambulances. Air ambulances appear to be reluctant to give information to mountain rescue as a standard operating procedure. Interoperability is a challenge, but I would suggest that it is a particular challenge with air ambulances.

[Mark Pawsey]

I certainly accept that point. One of the challenges for us, which is one reason why we have formed the new all-party group, involves trying to make the links that allow such interoperability. There is no point in having unused air ambulance assets dotted around parts of the country when they are badly needed in other areas. The point of an air ambulance is that a helicopter can move quickly between areas and provide such support.

A wide range of figures have been mentioned. The Association of Air Ambulances says that air ambulance charities across the country collectively generate an income of £46 million, with an average spend per helicopter of £843,000 and an average mission cost of £1,229. I accept that all those sums need to be raised through fundraising and that any savings that could be achieved would be welcome, but the cost of VAT on fuel needs to be seen in the context of some of the other significant costs, which put the total amount paid on VAT in perspective.

I fully support the motion’s tribute to our air ambulance services. They are worthy of more praise than they receive and I am glad that we have had the opportunity to pay tribute to them. I hope, however, that I have been able to put the cost of VAT on fuel in perspective and to suggest other, better ways of saving money through more efficient co-ordination of helicopter assets between air ambulance and emergency services. I hope that I have raised the concerns that the granting of a concession such as that asked for in the motion could be the start of a change to the unique method of funding our air ambulance services which involves the enthusiastic and active participation of volunteers up and down our land.

Prevention of Nuclear Proliferation

Rory Stewart Excerpts

Tuesday 13th December 2011 Commons Chamber

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

In the debate about Iran, we tend to be presented with two pictures of the country: either it represents an extreme existential threat to national security, in which case any response, however aggressive, is justified; or it is not a threat at all, and therefore we do not need to do anything.

The truth is of course more complicated and tragic. Iran poses a significant threat to the United Kingdom, Europe and the United States, but our options are limited. There is not time in a five-minute speech to talk about the issues that the hon. Member for Islington North (Jeremy Corbyn) raised, but it is true that Iran is a highly complex and fragmented society. There is an elite, particularly in Tehran, Isfahan and Shiraz, who are liberal, western-friendly and progressive, but there is also an extremely conservative and isolated rural population, who provide the support base for Ahmadinejad. There is no doubt at all, however, that Iran is a priority.

Many things in which the House has become involved have not been priorities. In recent debates, we have become involved in everything from Somalia to Mauritania, and we have exaggerated the importance of Afghanistan, but Iran clearly matters—in terms of its connection to terrorism, its nuclear bomb, rights and regional stability. There is no greater potential force for regional stability or instability than Iran, but we must face the fact that our current policy of sanctions, though rational and wise, is designed to delay the development of a bomb; and we must face the fact that there is a very high probability of Iran eventually developing a bomb. It may well develop a bomb even if an Islamist Government are not in place, because an atomic bomb has become a source of national pride for many people going well beyond the Islamist supporters.

What is our appropriate response to that threat? We should continue to do the things that we are doing at the moment. First, we should ensure that we have a clear, consistent policy towards Iran. That means that we do not wish to appease the Iranian Government, or to give any impression at all that our sympathies lie with that Government. We need to be robust in our defence of Iran’s regional neighbours, because the primary threat that will be posed by an Iran in possession of a nuclear bomb, however erratic and eccentric its Government are, is unlikely to be the bomb’s deployment; it is more likely to be a considerable increase in Iran’s prestige and in its threat towards its neighbours through terrorism or border disputes.

We must also, however, do things that we are not doing enough at the moment. One is to recognise that because the problem is primarily political, the Foreign Office and our armed forces must invest more and more in area expertise and linguistic expertise in relation to Iran because that will become more and more important—either in deterring some of our allies from unwise precipitate action or in helping us support our regional neighbours.

Secondly, it would make enormous sense to diversify our energy supply. Some 30% of the oil on which western Europe and the United States depend comes through the strait of Hormuz. That is far too much. Iran has a stranglehold on us, but we can overcome it through the smart deployments of new routes of delivering oil and gas to Europe and the United Kingdom.

Finally—a new idea in the last 30 seconds—we need to change our relationship with Shi’a communities around the Arab region and in Pakistan. Too often, we have acted as though Shi’a communities are natural allies of Iran, but there is no reason for them to be so. There is no reason why Britain cannot use its history and knowledge to develop a more constructive and productive relationship with those communities. If we can get that right, continue to invest in the financial sanctions and measures that we are already taking and develop the three areas that I have identified, we can move away from a policy of lurching from extreme aggression to inaction and find a principled, moderate and passionate response.

Fuel Prices

Rory Stewart Excerpts

Tuesday 15th November 2011 Commons Chamber

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

I join so many colleagues in congratulating my hon. Friend the Member for Harlow (Robert Halfon) on securing this fantastic debate. It is such a great example of how the Back-Bench system should operate. On that note, I will try to keep my speech as short as possible, limiting it to less than two minutes in order to let others speak.

I wish to make one very simple point on behalf of Cumbria: rural isolation is not just a question of sparse population; it is also about the terrible hollowing out of rural areas over the past 15 years. When I look out of my window at home, I see the disappearance of a school, a shop and a police station. In the past 15 years, we have lost 2,200 schools, 550 clinics and 150 police stations—that is across the nation, not across Cumbria.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

My hon. Friend will also be aware that 600 filling stations are closing every year, making the distance that rural inhabitants must travel to fill up their car even more demanding.

[Rory Stewart]

I thank my hon. Friend for making that point. The loss of pumps is an incredibly important issue, as is the loss of all the other services that are going such as pubs and shops. Currently, my neighbour, who has Parkinson’s disease, has to travel for two and a half hours to see a neurologist in Newcastle, and our schoolchildren are travelling further and further. There are things we can do to deal effectively with these problems, including with broadband and smart metering. It is a real disgrace that we have not sorted out smart metering. There is much better technology available. However, I should like to make a small plea for an extension, as rapidly as possible, of the 5p rebate that is currently offered in the highlands and islands to other sparsely populated areas of Britain.

[Graham Jones (Hyndburn) (Lab)]

I appreciate that the hon. Gentleman is making a rural point and that there are all sorts of issues about bridges and roads and the amount that goes into them, certainly in Lancashire. However, on his point about unfairness, was it not a previous Tory Minister who said, “When it doesn’t fit, get on your bike and get somewhere else”?

[Rory Stewart]

The hon. Gentleman will be astonished to discover that I disagree very strongly with the idea that the solution to problems of rural isolation is to “get on one’s bike and move somewhere else.” Our rural communities are the lifeblood of this country. When we think about our rural areas, we think about this country. Farming communities and all the other forms of rural community have a value that goes well beyond their economic value. We would be terribly sorry to lose them.

[George Freeman (Mid Norfolk) (Con)]

My hon. Friend is a passionate advocate of all things rural. Does he agree that the disproportionate impact of the tax on rural economies effectively makes it a tax on rural areas? It is a tax on the rural big society and on the rebalanced economy. If we are not careful, it will trigger a serious tax revolt in our rural communities.

--- Later in debate ---

[Rory Stewart]

I would never be able to speak with such eloquence as my hon. Friend, who makes a wonderful point. In order to fulfil my commitment and in honour of my hon. Friend the Member for Harlow and the Backbench Business Committee, I shall now sit down after making my plea: “5p for Cumbria.”

Motoring Fuel Costs

Rory Stewart Excerpts

Tuesday 14th June 2011 Westminster Hall

[Robert Halfon]

My hon. Friend is right. I will set out in a minute what the Federation of Small Businesses says about how the fuel price is crushing business and economic growth.

In total, my town is spending at least £63 million a year on petrol, of which about £40 million is tax. That does not even include gas and electricity bills, which are spiralling out of control. The budget of my local council is only £13.5 million a year. Imagine if people could keep even a fraction of that money in their pockets, to spend on the local economy, rather than giving it away to big oil companies, foreign countries and, dare I say it, the Treasury. However, I welcome what the Chancellor has done so far. When he refused to implement Labour’s petrol tax of 4p in April, and cut duty by 1p, he saved Harlow motorists at least £2.5 million every year, putting fuel into the tank of the British economy when we need it most.

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

I thank my hon. Friend for giving way and for securing this debate.

On the subject of the Chancellor’s initiatives, does my hon. Friend also support the decision to have rural fuel pilots, and acknowledge that constituencies such as my own of Penrith and The Border, where we have nearly twice the distance to travel to GPs, post offices and job centres, need to be recognised in a different way? The Chancellor is to be congratulated on the steps he has already taken on rural fuel, and he should extend them.

[Robert Halfon]

I very much welcome that initiative. I will say later that I believe a commission ought to be set up to look at all kinds of ways of reducing the price of petrol for motorists—that is one of them.

Amendment of the Law

Rory Stewart Excerpts

Thursday 24th March 2011 Commons Chamber

[Ed Balls]

As I said, the OBR says that subdued consumption outlook requires households to dip into their savings again in 2011, so the savings ratio continues to fall back from its post-recession peak. It also says that the savings ratio is now forecast to be historically low. Household debt as a percentage of income rises every year from 2010, even though it fell in 2009-10. Those are the facts.

Yesterday we needed a plan from the Chancellor to help hard-pressed families facing the squeeze, to get people back into work and to get our economy growing again. That is what we needed, and that is what we did not get. There was no change to a deficit reduction plan that is faster than that of any other major economy in the world. It pushes growth down and unemployment up. The Chancellor fails to realise that cutting too deep and too fast will make it harder to get our deficit down. He also failed to understand that while he gives the banks a tax cut this year, ordinary families are being hit hard now. It was a smoke-and-mirrors Budget.

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

Will the right hon. Gentleman please share his plan and growth strategy with us?

[Ed Balls]

I will gladly share our plan. First, the economy was strengthening and unemployment was falling—[Interruption.] The Chancellor’s Parliamentary Private Secretary shouts too loudly. Why does he not calm down a little? That may be how they do things in Chelsea and Fulham, but we do not do that in the House of Commons.

Unemployment was falling and growth was rising because we were halving the deficit over the four years. The Chancellor has gone from halving the deficit to trying to get rid of it entirely in four years, by implementing the largest cuts to spending and tax rises of any economy in the world. It is not working. In fact, we heard today that Moody’s, the credit rating agency, is looking at whether it needs to downgrade the British economy because of the threats to growth following yesterday’s Budget.

Secondly, Labour would repeat the bank bonus tax now, raise £2 billion for a second year, and use that to build 25,000 more homes and create 110,000 more jobs for young people who are now not going to get help from the future jobs fund. That was our second plan—and that option was entirely open to the Chancellor, but he chose not to repeat the bank bonus tax, but instead to give a tax cut to the banks.

Thirdly, we would have reversed the rise in VAT on fuel, because the Chancellor’s 1p cut in the Budget—there is still doubt whether that will actually get to motorists—is outweighed by the 3p a litre rise in fuel prices because of the VAT increase that he introduced just a few weeks ago. We cannot blame the Chancellor for the rise in world oil prices resulting from the middle east crisis. He made the right decision not to go ahead with the duty rise, and we would have done the same, given the level of world oil prices. However, the rise in VAT was a complete own goal. It pushed up inflation and prices and cut family budgets. It was a mistake. It was the wrong tax at the wrong time. The Chancellor should just admit that he got it wrong, go to his European partners and say, “Can I reverse this mistake before it’s too late?”

That is our plan, and the Chancellor—[Interruption.] Government Members shout, “Is that it?” but they do not understand the economics of this and the previous Budget. Halving the deficit over four years was ambitious but deliverable. Eliminating the budget deficit in four years means a massive fiscal contraction. Unless we suspend all the laws of economics, assume that no international evidence counts, and believe that fiscal multipliers do not count in our kind of economy, that kind of contraction in fiscal policy and its impact on the public and private sectors is crushing. Only Greece is trying to go faster. We have already seen the biggest fall in consumer confidence for 20 years, and unemployment is up before the cuts have really started to bite.

People are looking to the future and are worried, and the Chancellor is not listening. In his world, that is not a concern. He does not worry about what is happening out there in the real economy but for businesses and families up and down the country, the prospect of rising unemployment year by year, of slow growth last year, this year and next year, and of falling confidence, is a real concern. My advice to the Chancellor is this: take the blinkers off and look at what is actually happening in our economy. It is hurting, but it is not working.

--- Later in debate ---

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

I am very pleased to follow the Secretary of State for Business, Innovation and Skills, but, unfortunately, by the end of his speech he still had not told us a single practical thing from the strategy for encouraging growth. Despite all the pages in “The Plan for Growth”, the Office for Budget Responsibility stated yesterday that it found nothing that it could measure as contributing to an improvement in the UK’s growth prospects. He goes on about low interest rates, but I wonder whether he has tried to borrow, or knows of any small company that has had to borrow, in the current difficult market and has been able to do so at the low or zero interest rates to which he referred. That is absolute nonsense. It is divorced from the real world and he knows it.

The Business Secretary knows that when we were both in different places in the Chamber he used to say that we had either to establish a national bank or its equivalent or to make the banks lend. He has come up with no solution to the problem and the fact remains that the single biggest inhibitor to growth in the vital sector of small and medium-sized enterprises still remains, and that is their inability to access credit. How can they grow in a difficult situation when markets are flat without access to credit? That is the question he has not answered and until he has answered it, he has no credibility as a Business Secretary. We need definite plans for doing that at some stage.

[Rory Stewart]

Will the hon. Gentleman give way?

[Mr Robinson]

I shall in a moment.

It is no good the Business Secretary asking us for our plans. He now has responsibility, he chose to take it and he chose, also, to go into this coalition, having been convinced by a concerted effort by the Governor of the Bank of England and others that the Liberal Democrats were wrong before the election—that within one week of the election campaign, everything had been turned on its head and we faced an imminent crisis, the outcome of which was that we would face interest rate rises and an inability to borrow nationally, along the lines of the situation faced by Greece and Portugal. He knows that he did not even meet the Governor for a working over, because his leader, the Deputy Prime Minister, had already been worked over. Nobody else on the Government side needed to be worked over—the Governor had worked them over before and during the election campaign. The implicit deal was, “Go along with this huge deflationary package, and I will keep monetary policy so loose that you don’t need to worry—you’ll still get growth.” I believe that that is the sort of Faustian deal to which the Business Secretary referred in his reply to the Budget debate last year.

What have we seen since? Interest rates are still low and policy has been loose. No doubt it might even continue to be loose for a period of time, but I am sure that interest rates will go up in the near future. Irrespective of that, there is still no credit for the SMEs from which, as Sir Richard Lambert pointed out, the vast majority of jobs must come if the commercial and business sector—the private sector—is to recover. However, there is still no prospect of their being able to borrow. Why does the Business Secretary say, therefore, that there is no alternative because the OECD says so? The OECD is as wrong as everyone else. We heard last night from Robert Chote that all those forecasts are a “load of rubbish”. One cannot always be right about such things; nobody ever is. One might ask what the point of them is. Certainly, to invoke the OECD, which can be as wrong as anyone else, and say, “It says that we have to go on with this strategy, so therefore we will,” in the face of all the mounting evidence that the strategy is not working is perverse and not worthy of the intellectual distinction that the Business Secretary is capable of bringing to these problems.

The only thing that could be said in favour of the Government’s policies is that they have not had enough time yet—not quite a year—to have worked, but it is obvious that they are not working.

[Mr Robinson]

I shall in a moment, but the hon. Member for Penrith and The Border (Rory Stewart) is first.

The figures for every crucial forecast area of activity are pointing in the wrong direction. Unemployment is up, growth is down, inflation is up, bizarrely, and Government borrowing is up—the very thing they are meant to be getting down—as measured against the OBR forecasts. Those are the only measures we can use to judge whether their policies are working. We can look at the past and it is clear that they are not, but to see whether they are working, we have to look at the forecasts. The Government’s whole policy is predicated on such forecasts, but look at the figures now—down, down, down! Every single indicator is going the wrong way, but they still say that we have to press on with their programme—plan A or whatever it is. I think I heard the Business Secretary say, in response to an intervention from an Opposition Member, that some flexibility is built into the Government’s plan A. I do not know whether he will elaborate on that or whether I misheard—we will see in tomorrow’s Hansard whether I did. I did not raise the issue at the time because I was not sure whether I had heard right—I could not believe it. If there is some flexibility, the sooner it is acknowledged, built in and practised the better.

[Rory Stewart]

Clearly, it is very difficult to get banks lending to small and medium-sized enterprises and to balance the need for that against the problems caused by credit in the first place. What solutions does the hon. Gentleman propose?

[Mr Robinson]

I do think it is pathetic when the only answer that the Government, who are charged with handling the nation’s affairs, can come up with is, “What are the Opposition going to do?” If the Government want to vacate those Benches, my right hon. Friend the shadow Chancellor is not slow in coming forward and would be over there on the Government Front Bench faster than anyone. We have instead a Business Secretary who preached about these matters very eloquently when he was in opposition and said that he would be practical, but he has done nothing.

What do we have now that the current Government are in office? We have inflation going up to 4.4% or perhaps even 5% and the deficit reduction that was to come from growth being hindered because growth and the forecasts are all down. Each forecast, whether for borrowing, inflation, unemployment or growth, is heading in the wrong direction. Those are the facts. All indicators, whether for last year, this year, next year or even the year after that, are headed in the wrong direction. Perhaps the Government should fix the electoral cycle to have 10-year terms and then some latter-day outcome might eventually catch up with what they forecast at the beginning. It should be clear to anyone looking objectively at the evidence that the Government’s plan is not working, that it needs to be changed and that there are alternatives that could be pursued.

If we are talking about getting growth in the economy—the right sort of growth—I agree entirely that we need business employment and development in the private sector. Let us consider HS2—the stupid vanity project that I am sure the Business Secretary would have opposed when in opposition. It is being proceeded with despite the eventual cost of some £32 billion. I cannot believe that the Treasury is going along with it, but I am told that the Chancellor is, bizarrely, in favour of it. Why do we not switch from that to the simple plan that was set out in Atkins’ alternatives—I think it was alternative 2 —for an investment that could be proceeded with immediately, that would give us what is most needed right away and that would help Coventry: four-tracking the line between Coventry and Birmingham? That could have been given the go ahead this year, had effect next year and made a direct contribution.

Why cannot we get the schools programme back on track? Make it quicker, make it simpler—we would accept all the criticisms if that would make it easier for the Business Secretary to go ahead with it. In Coventry, we have not had a single school built—not one! One school in my constituency has been propped up by scaffolding for the past three years. I was on the shadow Chancellor’s back all the time about that when he was the Education Secretary, asking, “Why can’t we get it done quicker? Why can’t we do it?” I was told that procedures had to be gone through and all the rest of it. The Government should speed it up and get on with it, but they should not cut it and stop those projects as they are doing at the moment. I still believe that they should go ahead with some of the other important projects that we could do, particularly in transport, and that they should go ahead with building projects.

To take the example of building projects and the construction industry, I read a couple of days ago in the Financial Times that orders in the industry over the past six months are down 50% on the previous six months. Much of that would be good, constructive infrastructure investment of the kind we are want to see, creating employment and skills and making a real contribution to long-term growth in the private sector, and yet we have cut it by 50% in six months. That cannot make sense, and in the meantime unemployment, borrowing and inflation are going up—all the wrong indicators.

In my remaining minute I will focus on Coventry. I heard today that we have lost another 400 jobs in an insurance company there. Since the Government came in, around 2,500 jobs have gone in Coventry. If the Business Secretary is open to meeting companies inwardly investing in this country, which he says he is, will he come to Coventry to see the investment problems we have? We have nothing to take back to those people who have lost their jobs. I say to him that he should have the confidence and courage of his convictions and stand up to the Treasury and his so-called coalition partners, because things are going to get worse, and he faces returning here with his whimpering excuses to his own increasing embarrassment.

Scotland Bill

Rory Stewart Excerpts

Monday 14th March 2011 Commons Chamber

[Ann McKechin]

I was not a Member of Parliament at that time, unlike some of my colleagues who were in the House when the legislation was discussed in detail. I think it fair to say, however, that a great deal was left to the potential for secondary legislation. As the hon. Gentleman knows, those provisions have never yet been used. That is one of the reasons that the Calman commission specifically addressed the issue of fiscal accountability.

The hon. Gentleman may also be aware of recent debates in the Scottish Parliament following the decision of the Finance Secretary—without informing the Parliament—to advise HMRC that it would not be required to implement the rules for a few years. I do not wish to discuss that controversy, but I will say that the establishment of the Calman commission was partly due to the fact that the rules had never been implemented. Much of the detailed work that we are now considering had been put on the shelf without being properly examined. I take the hon. Gentleman’s point, but I think it necessary for me to ask the Minister a number of detailed questions in order to ensure that the Government’s intentions are on record.

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

Given that income tax issues such as this are addressed throughout the world where jurisdictions—for example, American states—abut each other, does the hon. Lady consider them to be reasons for fundamentally objecting to the Bill, or simply matters of minor detail that could be resolved by means of secondary legislation?

[Ann McKechin]

As I have made clear, on Second Reading and throughout this debate, Labour fully supports the principles behind the Bill and the additional fiscal powers given to the Scottish Parliament. Before the election, the Labour Government supported the Calman commission, as we made clear in a White Paper published in the summer of 2009. I think that all these issues can be dealt with, but, as I am sure accountants and lawyers will confirm, the devil is in the detail at times. It is important for the House of Commons and, no doubt, the House of Lords to give the Bill proper scrutiny, because ultimately individual taxpayers, businesses and employers will have to live with the consequences of its implementation.

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.