Fuel Prices

Russell Brown Excerpts

Thursday 13th September 2012 Commons Chamber

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

I also congratulate the hon. Member for Harlow (Robert Halfon) on securing this debate and will begin where he finished—on the issue of fuel poverty. When we talk about fuel poverty in this House—we have done so for many years—we usually consider it in terms of household energy bills, but from what I have heard this afternoon, many are facing the same problems as those experienced in my constituency, where a low-wage economy in a rural area means that people are having to spend more on fuel for their family car. As has been said, people who have to use their car in a rural area such as mine and elsewhere are being driven into fuel poverty. People are even being driven to the point of wondering—we have heard this once already—whether they can continue to go to work and afford to run their car, because they have a 30, 40 or 50-mile round trip every day to work. That is becoming less viable for some households.

There is no doubt that something is happening in the marketplace. I, like Members from all parties in this House, wrote to the Chancellor to say, “Please do not impose the 3p fuel duty in August,” but what did we witness anyway? A standard note produced by the House of Commons Library shows that the price of fuel at the pumps increased by 3p. Something is happening. No matter what we do—if we reduce the duty, for example—something happens. The hon. Member for Na h-Eileanan an Iar (Mr MacNeil) mentioned the rural fuel derogation. I strongly suspect that, despite the 5p reduction, prices still went up, so the 5p fall was wiped out entirely. Manipulation is going on in the marketplace.

[Mr MacNeil]

I am grateful to the hon. Gentleman for raising that point. The price of fuel went down and up in a certain way, as if to disguise what was happening, so it was difficult to get to the bottom of what was going on because fuel is not tied to a regulator.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. On interventions, it is not fair for Members who have already spoken to use up the time of others. A lot of Members want to get in and we ought not to be so generous.

[Mr Brown]

Thank you, Mr Deputy Speaker—I will not let the hon. Member for Na h-Eileanan an Iar get back in again. The door is closed. He is right, however: whether something is disguised or manipulated, it is happening.

I do not want to have a go at the hon. Member for High Peak (Andrew Bingham)—he is a decent guy—but let me put the record straight for him. On 11 occasions over nine years, the previous Government either froze or cancelled the fuel duty increase that had been in the Budget. We are all battling to put this right.

As oil prices increase, so do the costs of heating oil and liquefied petroleum gas. The last peak in pump prices was back in the summer of 2008, and at that time the price of fuel at the pumps was driven by crude oil at a price of $140 per barrel. Last week, according to The Daily Telegraph—not my favourite read—the price of crude oil was $113.49 per barrel, so we are a long way off the $140 per barrel that resulted in the peak in prices during the summer of 2008. There is manipulation. I do not think that there is any doubt about that.

I say again to the hon. Member for Harlow and others that I want VAT to be reduced from 20% back to 17.5%. The increase to 20% put fuel prices up by 3p or 3.5p a litre, which is the highest increase under the coalition Government. A reduction in VAT would help, but we must be wary to ensure that the oil companies do not try to squeeze the prices a little more and recover that money.

I am delighted that the Office of Fair Trading will look into this matter. I was surprised when it wrote to me two weeks ago to say that it would do so because of the representations that I and others had made. I say to colleagues in this House, let us not hold our breath, because the OFT’s previous work, especially in the more rural locations in Scotland, came up with nothing. We need answers about what is going on in our communities and about what consumers and our constituents are being faced with. We therefore need the evidence to go to the OFT and for it to have a robust inquiry to put the matter right.