Finance Bill

Sarah Newton Excerpts

Monday 2nd July 2012 Commons Chamber

[Miss Smith]

I shall certainly confirm that. It is testament to the repeated action that this Government have taken to support motorists that that is indeed the case.

[Sarah Newton (Truro and Falmouth) (Con)]

Does my hon. Friend agree that this reduction in fuel duty is vital not only for motorists but for small businesses such as those in Cornwall that have long distances to take their goods to market, and that it shows that this Government are listening and are on the side of hard-working families and small businesses?

[Miss Smith]

I am grateful to my hon. Friend. She is not only in fine fettle, as she is standing without crutches, but rightly points to the effect that we know this will have on households and businesses.

--- Later in debate ---

[Robert Halfon]

In the Westminster Hall debate, which the hon. Lady mentioned, the Economic Secretary did not give a view either way on the issue and said that the Government were looking at it. Ministers then came to the House for Treasury questions. What better way of informing us that they were going to stop the August rise?

Returning to the “Today” interview with the shadow Chancellor, he said that Labour had “acted” on petrol prices, but a House of Commons Library note says:

“From 2000 the Labour Government increased road fuel duties...In its 2009 Budget the Labour Government announced that in future years fuel duties should rise by 1p a litre above inflation.”

In the next Budget, they

“proposed that the escalator should apply at least until 2014/15”,

and that

“the increase set for 2010/11 would be phased in over the coming tax year in 3 stages...fuel prices continued to rise strongly, driven by this increase in duty rates”.

That is the record we inherited, and which we are now having to unwind.

[Sarah Newton]

Will my hon. Friend give way?

[Robert Halfon]

I apologise, but I cannot, as I have to allow time for the Minister to respond.

There are still problems: fuel is still at around £1.30 a litre, which is unsustainable. As the RAC has said, duty revenues are shrinking every year, as people are driven off the roads. We must stop seeing cars as a cash cow.

I accept that the Government can only do so much. We are always held hostage by the international oil price. As has been noted, however, pump prices are quick to rise, but it feels as though we need a court order to get them down. Evidence shows that from May to August last year, oil prices fell by 5.5%, but petrol and diesel stayed high, falling by just 1.5%.

The Office of Fair Trading has said it will not investigate the UK oil market. I am petitioning the Backbench Business Committee to table a motion so that Parliament can urge the OFT to investigate that market, which clearly looks uncompetitive and unfair to many people.

Finally, there is the problem of local variation in petrol prices, especially in rural areas, but also in towns like Harlow. Harlow residents often write to me, saying that fuel is 5p cheaper only a couple of miles down the road, and there is no explanation for it, other than a lack of competitiveness. Germany, Austria and America have initiated fuel price regulation to limit price rises. We should be doing the same thing.

In conclusion, the Chancellor and the Economic Secretary have given Harlow families and many millions of motorists across the country at least six months’ breathing room, and I welcome that. I urge the Government to look seriously at the long-term cost of fuel and petrol, and see what else they can do. I also urge them to put pressure on the OFT to do a market study. I will vote wholeheartedly for the Government’s new clause, and I urge the House to join me.