Fuel Prices

Sheryll Murray Excerpts

Tuesday 15th November 2011 Commons Chamber

[Stewart Hosie (Dundee East) (SNP)]

I congratulate the hon. Member for Harlow (Robert Halfon) on securing this debate. It is important, and he will know that in the previous Parliament there were a number of debates on the subject and a number of attempts in Finance Bills to introduce a fuel duty regulator—precisely the price stabilisation mechanism that he describes in the motion today.

Going back over such debates from the previous Parliament is quite instructive, because it tells us why there is such anger among the general public. In the report of a debate in 2005 we read that the price of unleaded petrol had risen to 86p a litre, a rise of 6p in six months; by 15 May 2008 it had gone up to something over £1.10 a litre; and by the time of the Finance Bill debate in July 2008 it averaged £1.32 a litre.

The underlying price is more intriguing, however. In 2005 Brent crude had risen to $60 a barrel, up a massive $10 on the previous year. By the time of the debate on the 2007 pre-Budget report it had risen to around $84 a barrel. In the run-up to the 2008 Budget the price was $94 a barrel. As someone mentioned earlier, prices crashed through and spiked at around $140 a barrel. This week the price has stabilised at $114 a barrel, but the price at the pump has risen inexorably.

From 86p a litre in 2005, diesel prices in Dundee this week had risen as high as 140p a litre—£6.40 a gallon. In the constituency of the Chief Secretary to the Treasury diesel was nearly 145p a litre—£6.60 a gallon. In Kirkwall, in the constituency of the Liberal Deputy Chief Whip, the right hon. Member for Orkney and Shetland (Mr Carmichael), diesel is 152p a litre—£6.90 gallon—and in the constituency of my hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil) it is almost £1.54 a litre. That is £7 a gallon, so it now costs £90 to fill up the tank of the average family saloon car. One can quickly see why people are so angry.

In our past debates, we heard about support outside Parliament from many organisations. The Road Haulage Association said:

“UK hauliers are struggling as never before to cope with continually rising fuel prices”.

Nothing has changed. The National Farmers Union and the Scottish Fishermen’s Federation said similar things. The Federation of Small Businesses said that it was

“behind the introduction of any mechanism which automatically uses extra tax revenues…to reduce prices at the pumps”.

And, my goodness, we need that now.

[Sheryll Murray (South East Cornwall) (Con)]

The hon. Gentleman mentioned the Scottish Fishermen’s Federation. Does he agree that many fishing vessels can reclaim the duty, so it does not affect them?

[Stewart Hosie]

Indeed, they can. What that organisation said at the time was:

“Transport is…a vital component of the fishing industry and cost increases there have applied even greater pressure, felt more acutely by the more remote fishing areas of the North West and the Northern Isles.”

I was paraphrasing what it said, as we have a whole four minutes each to speak. The point is that the response to spiralling costs under Labour was a fuel duty escalator, not a fuel duty stabiliser. The Labour Government set their face against every attempt to introduce a price stabilisation mechanism and, most cynically of all, increased duty to compensate for the temporary reduction in VAT.

The coalition’s response was to introduce the “fair fuel stabiliser”. That is what they called it. However, instead of using the windfall they already had from the North sea, they engaged in a smash-and-grab raid of £2 billion extra, with an increase in the supplementary charge. Hon. Members will remember that that led EnCore Oil to suggest that no tax would be paid on undeveloped and undiscovered oil. Other organisations said that very large projects were no longer viable because of the surprise Budget move. Chevron warned that the measure had

“shaken investor confidence to the core.”

Everyone was singing from the same hymn sheet except the Chancellor, who said that he

“did not expect investment to be damaged.”—[Official Report, 3 May 2011; Vol. 527, c. 604.]

--- Later in debate ---

[Sarah Newton]

What we are all agreed on today—I hope we will hear this from the Minister—is that we should leave no stone unturned in finding ways to stop the increases in fuel prices and in starting to tackle the problems that we have heard about in this debate.

I will not use the limited time that I have to duplicate the points that have been made by my colleagues, the majority of which I agree with. However, I will develop the issue raised by my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) about the impact of rising fuel prices on volunteer transport schemes. Like many rural areas, my constituency does not have good public transport. It also has a high proportion of elderly people, many of whom are living in poverty.

We have one acute hospital that serves everybody living in west Cornwall. Volunteer drivers play a vital role in taking people to hospital, to their GPs and to other therapeutic appointments. Volunteer-run minibuses are also very important. One such service, Transport Access People, run by Age UK Cornwall, is based in my constituency. TAP has just under 30,000 clients and its volunteer drivers have clocked up more than 2.6 million miles. It currently has 250 volunteer drivers, but it has lost six in the past couple of months because of rising fuel prices.

[Sheryll Murray (South East Cornwall) (Con)]

Transport Access People covers not only the west of Cornwall but the whole of Cornwall. In my constituency, TAP is finding it extremely difficult to get volunteer drivers because of the excessive fuel costs that they have to pay.

[Sarah Newton]

My hon. Friend makes a very good point, as usual. To cover the increased costs that she mentions, TAP has had to put its price up to 41p a mile. It is worried about the future, because it may have to raise it to 45p a mile, which is what similar organisations in other parts of the country are having to charge. Given that the average journey is 25 miles, and that it is not uncommon for patients to travel 50 miles for an appointment, we can see how prices are mounting up for patients. Some are entitled to free travel, but many people on very modest incomes are not.

A report by CAB Cornwall, the citizens advice bureau, has highlighted the fact that some people are not attending hospital appointments because they cannot afford to. That is a waste of precious NHS resources and not at all good for the patients concerned. Work is being done locally to try to address that, with more NHS services being moved closer to people’s homes, but that will take time. I hope that the Minister will commit to considering what further help the Government can provide to keep these much-needed volunteer drivers on the road.