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16:00 - The House divided: - Ayes: 103 / Noes: 259 - Question accordingly negatived.
Mr Speaker
I inform the House that I have selected the amendment in the name of the Prime Minister. I call the shadow Secretary of State.
Mr Richard Holden (Basildon and Billericay) (Con)
I beg to move,
That this House believes that it is wrong to increase the main fuel duty rates on 1 September, then again on 1 December 2026, with a further increase on 1 March 2027, by a total of five pence per litre, as global oil prices are rising; notes that these increases will affect drivers, farmers, businesses and other hard-working people already struggling with higher taxes and higher cost of living as a result of the Government’s economic policies; and calls on the Government to maintain the five pence per litre cut to the main fuel duty rates introduced by the previous Government beyond September 2026.
Once again, this House has come together to hear of yet another egregious tax on transport, pushed out by this Labour Government at a time when people across the country are worried about the cost of getting around. On this occasion, in their infinite wisdom, the Government have decided that this is the opportune time to cancel the fuel duty freeze that the last Conservative Government kept for 13 years, which protected hard-working people from paying extra to get to work, attend appointments and visit friends and family. The Conservatives cut fuel duty by 5p per litre in 2022—the biggest ever cut in fuel duty—which really helped when the economy was facing headwinds from Russia’s illegal invasion of Ukraine.
Under this Government, though, on top of the countless tax rises that they have already shafted us with, we cannot even get through two years before they decide that the British people need yet another tax rise. It is a tax rise that is being introduced in a sneaky and stealthy way. Labour is deploying its salami tactics—1p in September, the back to school tax; 2p in December, the Christmas shopper tax; and 2p in March, springtime for taxes. We should not forget that a 5p per litre increase in duty is actually a 6p per litre increase, because VAT is added on top of that tax.
In September last year in this Chamber, the Transport Secretary trumpeted that Labour had
“frozen fuel duty—that is what we have done”—[Official Report, 11 September 2025; Vol. 772, c. 1021.]
Yet we know that is simply not the case. It reminds me of my childhood, watching Chris Tarrant on “Who Wants to Be a Millionaire?” saying, “But we don’t want to give you that.” The Transport Secretary has said that tax rises are now coming, not once or twice, but three times: in September, in December, and in March next year. With economic growth at a dismal 0%, the British people deserve better than underhand tactics swindling them out of the pounds in their pockets to pay for more welfare. It is a tax on every car, every van, every motorbike and every bus, and it is also a tax on hauliers, businesses and families—it is a tax on the country as a whole. Thanks to the Transport Secretary’s Government, those families will be forking out an extra £156 a year.
Jim Shannon (Strangford) (DUP)
I congratulate the shadow Secretary of State and the Opposition on securing this debate. It is important that we consider this matter, as we are fast approaching a crisis that cannot be circumnavigated. Does the shadow Secretary of State agree that the Government must consider reopening North sea production to produce enough for our needs, if they continue to refuse to play their part in securing fuel elsewhere? Does he not agree that fuel duty would benefit from self-reliance, rather than dependence on volatile nations, as we have at this very moment?
Mr Holden
I could not agree more with the hon. Member. We need to get back to drilling in the North sea. Norway is drilling on one side of the same basin and getting the benefit of those jobs and the tax revenue. It bemuses me why we are not doing that here. The shadow Energy Secretary, my right hon. Friend the Member for East Surrey (Claire Coutinho), has consistently said from these Benches that that is exactly what we should get on and do.
Graham Stuart (Beverley and Holderness) (Con)
My right hon. Friend makes a powerful point about North sea oil and gas extraction. The Labour party says that will not make any difference to the global price of oil and gas, but billions and billions of pounds in tax will be lost as a result of having no new licences in the North sea. Those billions could be used to replace the revenues generated by fuel duty. In fact, if the Government wished, they could convert those billions into cuts in price at the pump for every single family in the country, including those in rural Beverley and Holderness who are suffering today.
Mr Holden
My right hon. Friend makes an incredibly important point. The Government are forgoing tax revenue that is going into the coffers of other Treasuries right across Europe and across the world, but why? To what end? We will see whether Ministers will answer why they are willing to forgo hundreds of thousands of jobs and billions of pounds every year. [Interruption.] They could spend that on anything they wanted to, and they are not even going to do it.
Mr Speaker
Order. Parliamentary Private Secretaries are not there to chirp all the way through and give solutions to a problem. I have great confidence in the Minister’s ability to answer when he comes to speak.
Dr Andrew Murrison (South West Wiltshire) (Con)
Does my right hon. Friend agree that the Government’s policy fails on its own terms, because they say they want to subscribe to net zero and make us much greener in how we approach our energy consumption, yet we know that importing liquefied natural gas from countries such as the US has a carbon cost that is a multiple of extracting the stuff in this country within our own territorial sea? If the Government are serious about net zero, they would therefore be pumping LNG from the North sea, not importing it from the US.
Mr Holden
My right hon. Friend makes an incredibly important point, and he makes it clearly. He is in agreement with the Climate Change Committee, which says that we will have to be using oil and gas well in to the second half of this century. Why on earth should we not drill our own at lower cost and bring in those jobs and taxation, while getting the environmental benefits of doing it on our own doorstep under British regulations? It would not be extracted in other countries with lower regulations and lower environmental standards. The best environmental standards in the world exist in our North sea.
Mr Louie French (Old Bexley and Sidcup) (Con)
Part of this debate is about sustainability and net zero. Colleagues have already made a number of interventions on that, and I understand the shadow Secretary of State’s position. Does he agree that while we are focusing on the hike in fuel duty, the Government are also increasing the charges on electric vehicle drivers? Both sets of drivers are being hammered by this Government, who have not thought through the consequences of their policy.
Mr Holden
My hon. Friend makes an interesting point at this juncture. It is clear that the Government are trying to undo the damage they have done with their new tax. They are having to put more money into the electric car grant than they will get out from these pay per mile schemes, which they had previously said they would not introduce. The Government are costing themselves more money by imposing a tax. Whether it is the North sea or taxation policy, what they are up to is incredible. The TaxPayers’ Alliance has said that, after this tax hike, the average driver will pay almost £40,000 in fuel taxes over their lifetime, and it will be a higher proportion of someone’s income if they are in a lower paid job and need a car to get about.
Matt Western (Warwick and Leamington) (Lab)
The shadow Secretary of State is talking about how money may be spent from taxation. I highlight that local authority road maintenance budgets halved from £4 billion to £2 billion in the 13-year period from 2006 to 2019. If we look at inflation, Bank of England data shows that from 2006 to 2026, overall inflation ran at 74%, but fuel inflation was just 58%.
Mr Holden
Indeed. On the hon. Member’s second point, inflation would have been higher overall if fuel inflation had been higher overall. He makes an important point about potholes and road maintenance. It is interesting that he stood on a manifesto at the last general election that promised to fill an extra million potholes a year. We saw the figures just a few weeks ago showing that exactly the same number of potholes were filled last year as were filled in the last year of the previous Government. I look forward to seeing his Government starting to deliver on any of their pledges. Perhaps they could do so a bit more easily if they had that tax revenue coming in from the North sea, as those on the Opposition Benches would like to see.
This is Labour’s regressive tax raid. Do we expect those on the Government Benches to understand just how punitive this tax measure will be? Of course not. How could they understand, when it is rural communities that will be hit hardest, as it always is with transport? The truth is that the Department for Transport and the Treasury working together is more like watching an episode of “Hustle”. The con is on, and it is being perpetuated by this Labour Government.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
Does my right hon. Friend agree that in large rural constituencies such as mine, it is not just about constituents having to pay additional fuel duty at the pump, because they also pay it through everything they buy? Everything has to be transported into these rural areas, and there are services that they require. They therefore pay twice, which makes this tax rise doubly regressive.
Mr Holden
My right hon. Friend raises an incredibly important point. It is not just those who have a car who will be paying for this policy—although they will be paying the most—and it is not just those who rely on a van for their business or work to get around who will be paying; everyone will be paying, whether they use the bus or are just going to the shops. The truth is that everything has to be transported by road in this country. This tax rise will have huge inflationary pressures right across the board, not just for fuel, whether for heating or for road transport, but, as he is right to say, for so many other areas—areas that have not even been considered by the Treasury.
Dr Luke Evans (Hinckley and Bosworth) (Con)
All my right hon. Friend’s arguments stand, and that was true before the war in Iran. The Prime Minister stood there on Monday saying that the freeze is still in place, but the world has literally changed around us. Does my right hon. Friend share my concern that this Government are not being reactive and following the change? There will be a big impact and a knock-on effect, and the Prime Minister is touting this policy as though it is new, when it was in the Budget last year.
Mr Holden
My hon. Friend makes an important point. He will be aware that when the fuel price goes up, the Government’s VAT revenues from fuel go up at the same time. They are already seeing hundreds of millions of pounds a year extra in VAT, purely from the fact that the underlying price has gone up. My hon. Friend makes another important point, which is that this is a moment for the Government to reconsider. We on the Opposition Benches opposed this measure at the Budget, because we thought hitting working families was the wrong thing to do, but it is doubly the wrong thing to do when prices are also going up internationally.
Carla Lockhart
Does the right hon. Gentleman agree that the £53 million is welcome, but that calculates to about £35 a household, which is nothing in the grand scheme of things? Does he agree that fuel duty should be cut, VAT should be removed and the North sea opened up? That should come alongside dealing with fertilisers and red diesel, which are heavily impacted too. We need support for people now.
Mr Holden
The hon. Lady raises an important point. As she suggests, the tax revenues from reopening the North sea for oil and gas could be spent in a number of ways, but we have to open the North sea—a cost-free and environmentally positive alternative—to obtain those revenues, and then we can consider all the different ways in which Members across the House would want to spend the money.
Since the Labour Government came to office, we have seen just how much they have hit transport across the country. The fuel duty rise of 5p a litre is just the latest example. First they abolished the much-loved £2 bus fare cap, which the Conservatives had pledged at the general election to continue for the entirety of this Parliament: they have put bus fares up by 50%. They have also jacked up airport business rates, by a staggering average of 295%. Who is benefiting from that? Certainly not passengers, certainly not the airlines, and certainly not British business. They have also raised air passenger duty, with passengers facing a 15% jump in one year alone, followed by permanent increases, year after year after year, of between 3% and 4%, just to get on to a plane.
In the last few weeks the Government have raised the price of railcards for the first time since—[Interruption.] Perhaps they would like to chunter about this one. Do you remember this one, guys? We hear nothing from them on this. They have raised those prices for the first time since 2013—the first time for more than 10 years. They have increased the price of senior railcards, veterans’ railcards, young people’s railcards. New taxes on people throughout the country are being raised by this Government. We are seeing a 16% rise for the first time since 2013, and they did not even know about it, because they do not care about young people, about old people, about those who are being affected by the tax rises that will be hitting people all over the country from September onwards.
Labour has also just introduced a new policy that will leave ferry passengers on the Isle of Wight facing bigger crossing charges: £30 more per crossing. That will hit family holidays in the UK, and it will hit people from the Isle of Wight who are just trying to go about their daily lives. Labour is stealthily—
Blake Stephenson (Mid Bedfordshire) (Con)
Is it worth emphasising that the Conservatives froze fuel duty for 14 years, which took £100 billion off the cost of driving? That is an example of taxes that we cut over those 14 years. In contrast, this Government have increased taxes by £66 billion in the past two years. Is it not outrageous?
Mr Holden
My hon. Friend is right, and some of those tax rises are hitting many of the companies that will also be hit by these fuel duty rises. I have spoken to hauliers, in my constituency and across the country, who already face increasing business rates and increasing national insurance costs and are now being hit with a fuel duty rise as well.
Harriet Cross (Gordon and Buchan) (Con)
My right hon. Friend is making a great speech, as we always expect from him. Does he remember that, for the 2024 Budget, the Chancellor stood there and said that increasing fuel duty would be the wrong choice for working people? She said then that that was because of uncertain global events, and that the cost of living remained high. Does my right hon. Friend remember anything changing between 2024 and now? I do not think that the position has got any better—does he?
Mr Holden
My hon. Friend is entirely right. She is also a real champion for the North sea oil and gas sector, which is largely based in her constituency.
What are we seeing on top of those taxes on railcards, ferries and airlines—through increased airline business rates—and, obviously, the 50% hike in bus fares? What else is Labour up to? Well, the Government have been talking quite a lot about something called “simpler fares.” What they are actually doing is cutting out the cheaper fares preferred by passengers and replacing them with more expensive ones. That has been confirmed, in a letter to me, by none other than the Secretary of State for Transport, who I note is not present today. She says:
“Some passengers may pay more under this new structure but will gain”
—perhaps—
“more flexibility for their return journey”.
Well, my constituent Mr Nottage, of Ramsden Bellhouse near Billericay, has been quite perturbed about having to pay an extra 10%, and he is having to pay an extra fiver a year for his senior railcard as well. That hardly suggests that rail prices have been frozen under Labour. In fact, rail prices are going up for working people across the country.
Mr French
My right hon. Friend is making a passionate speech about the increase in rail fares for his constituents in Billericay, but he will be aware that drivers in Billericay, like those on the south side in Bexley, have also faced increases in the Dartford bridge charge, which this Labour Government hiked by 40% last September. Sadiq Khan has introduced the Blackwall tunnel charge for those trying to travel from east to south and in the other direction, and the ultra low emission zone has been expanded for those who need to travel into London—again, against the wishes of people in outer London. Does my right hon. Friend agree that the problem is not just the Government’s increased taxes on drivers, but the increased taxes from the Mayor of London on everyone on the outskirts of London who needs to travel in and out?
Mr Holden
That is an extremely important point. This is not just about the Labour Government; it is also about Labour mayors and Labour councils and their war on motorists up and down the country, whether it is the Dart charge or the ULEZ charge. We have even seen Zipcar having to cease operations in the UK because of the Mayor of London’s extension of that congestion charge to electric vehicles every day. We are actually seeing a reduction in shared transport options under this Labour Government and this Labour Mayor, here in our capital city, and it is an absolute disgrace.
Mr Holden
I am sorry, but I need to make a little more progress, but I will happily come back to my hon. Friend later.
However we travel, Labour is after us. Is it a boat? Is it a train? Is it a plane? No, it is Labour’s taxman coming for us. And where will this money be spent—all the extra money from Labour’s taxes on the public? It will not be spent on hard-working families or to create jobs and boost opportunities; it will be frittered away on more welfare, because this Prime Minister and this Government Front Bench are too weak to stand up to their own Back Benchers and ensure that welfare is kept under control. They are picking the pockets of hard-working people to pay for those who choose not to work.
When it comes to paying at the pump, Rachel Reeves has been happy to try to lay the blame at the feet of the petrol stations, but what makes up most of the cost of a litre of petrol? Her fuel duty is by far the biggest chunk. In fact, taxes make up 55% of the cost of fuel, and it is going up under Labour. When the Energy Secretary was presented with these sickening statistics, he claimed:
“That’s why we’ve frozen fuel duty.”
Why on earth do the Government not do what we did by freezing it all the way through? They could do it today, but they are not going to do it because they are too afraid of their own Back Benchers when it comes to welfare. I am surprised that Members are aligning themselves with the spluttering spinelessness of Mr Miliband—I am sorry; I mean the right hon. Member for Doncaster North. We know that for her and Ed, when the facts change, when countries all around the world change, Labour just digs in.
Mr Speaker
Order. You have referred to “Rachel Reeves”, but she is the Chancellor of the Exchequer. I do not think that “Ed” is quite the right title either, and I know that you would not want to get that wrong.
Mr Holden
Of course not, Mr Speaker. The right hon. Member for Doncaster North (Ed Miliband) should always be given his proper title.
This is very similar to the Government’s pathetic intransigence when it comes to the zero emission vehicle mandate. They remain entirely aloof, soldiering on, whatever the cost is to British companies, British workers and British taxpayers. This is just like the electric car mandate, with its impact on industry. The unions—Labour’s own paymasters, for crying out loud—the Financial Times, and even the renewables sector: everyone knows that we must have a change in the electric vehicle mandate. Everyone on the Opposition side of the House also backs driving ahead with North sea oil and gas exploration, but what do the Labour Government do? They just bury their heads in the sand and turn to taxation instead in order to pay for their policies.
Mr Speaker
Order. Mr Stuart, can you make a better effort than just waving your hand? You are not at a taxi rank. Is the shadow Secretary of State giving way to Mr Stuart? There you are, Mr Stuart: he is giving way to you. If you get off the seat, it might help.
Graham Stuart
I do not know whether I am being picked on or specially singled out, but in any case, Mr Speaker, thank you for selecting me.
One aspect that my right hon. Friend has not mentioned today is the Clean Power 2030 action plan. Bringing it forward from 2035 means that we are overpaying for the renewables, and locking in those overpayments for 20 years. Does my right hon. Friend agree that, along with the immediate negative impacts on our economy and, most importantly, on our constituents, locking in long-term contracts for overpriced renewables will increase the cost of living even further?
Mr Holden
That is another important point, which has also been raised with me by companies such as electric vehicle charge point manufacturers here in the UK. Some of them are on the verge of collapse because of that high cost of electricity. Although the Government say that they are pursuing a green agenda, what they are actually doing is making electricity so expensive that no one can operate a business in this country without paying such high energy prices that it becomes uneconomical to do so.
Dave Doogan
The shadow Secretary of State mentioned his perception of the intransigence of this Labour Government, to which I would add their brittle hubris in their pursuit of not achieving any form of economic growth. Does he agree that the Chancellor would not have to keep dipping into the pockets of hard-working people in the midst of a cost of living crisis if she had a clue about how to achieve economic growth?
Mr Holden
It is not often that I agree with an SNP spokesperson, but I very much do so today. The hon. Member makes an incredibly important point. The Labour party came to office talking about how growth was its No. 1 priority. Has anybody heard Ministers, or heard the Parliamentary Secretary to the Treasury, the hon. Member for Swansea West (Torsten Bell), say that on the telly recently? I certainly have not. Their talking point has, sadly, been put to one side, and we can all see why. On their watch, growth has totally collapsed, inflation has gone up and unemployment has gone up. Growth has collapsed on his watch. For all of his high-falutin’ ideas, he is a member of a Government who have collapsed growth in this country, and he cannot even accept it.
Mr Holden
No, I have already given way to the hon. Member.
We in the Opposition are all praying for a U-turn on the fuel duty policy, which would be very welcome. We would rather that they had never come up with the policy in the first place because, just as with the previous 16 U-turns, we argued against each policy before the Government did it, and they then had to U-turn on them. Just as on the family farms tax, on which they have partially U-turned, the grooming gangs, on which they have U-turned, and winter fuel, on which they have had to U-turn, after sticking the boot in, we really hope they will think again about this, but I am not holding much store by that.
What is really worrying me and families and up and down the country, as well as Opposition Members as they go back to their constituents, is that people are facing cost of living pressures right across the board. Those running businesses are really having to make decisions about whether they hire another person or in many cases, sadly, let people go because of the taxes already imposed by this Government. This is just another tax—another tax on businesses, pensioners and families up and down the country.
Dame Caroline Dinenage (Gosport) (Con)
Gosport is not a rural area, but it is reportedly the largest town in the UK without a railway, so people rely on their cars to get around. We all know that the Chancellor cannot control events in the middle east, but being in government is about making choices. Does my right hon. Friend agree that the choice is whether we are going to keep punishing traders who have already had so much punishment from this Government, and keep punishing people who do not have a choice about using their cars?
Mr Holden
My hon. Friend makes the really important point that this is about choices. She is also right that many people do not have such a choice about their cars, and nobody has a choice about going to a shop to buy food, which will be delivered by some form of road transport at some point. So everybody will be paying for Labour’s road tax or fuel duty increases, and that is what we are opposing today.
My hon. Friend the Member for Gosport (Dame Caroline Dinenage) makes a broader point on the choices that this Government are making about on whose backs they are balancing the books. They are choosing to balance the books on the backs of working Britain. Businesses up and down the country are facing tax after tax and new bill after new bill, in the Government’s relentless pursuit to do our country down and throttle anything that seems to give a half chance of delivering growth, all to pay for a ballooning welfare bill. They would put Dumbo to shame, because they do not have the guts to reduce welfare—heaven forbid—and they do not even have the guts to try to slow the pace of the increase in welfare.
We voted against tax hikes in the Budget because they are the wrong thing to do for growth in our country and for families in our country. We are voting against a tax hike today because of the circumstances now. Especially with an international environment of soaring prices, to saddle motorists with an extra hike in the cost of getting around is the wrong thing to do. That is why the Leader of the Opposition tabled our motion, and why we are urging right hon. and hon. Members across this House to say no to Labour’s hikes on fuel duty.
The Parliamentary Secretary to the Treasury (Torsten Bell)
I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“recognises that, at the Autumn Budget 2025, the Government extended the five pence per litre fuel duty cut for five months and cancelled the inflation linked increase for 2026-27; welcomes that Fuel Finder helps consumers compare prices and encourages competition and that the Government has ensured that all UK petrol filling stations must report prices within 30 minutes of a change; notes that HM Treasury will continue to work with the Competition and Markets Authority on behalf of consumers; and further notes that the Government keeps fuel duty under review and that a rapid de-escalation in the Middle East is the best way to keep prices low at the pump.”
I thank the shadow Secretary of State, the right hon. Member for Basildon and Billericay (Mr Holden), for opening this debate. The Government recognise that fuel costs matter enormously to people right across the country. Fluctuations in pump prices cause fluctuations in working people’s bank balances. The effects are real and, as we have heard, widespread; about 80% of us drive each week. That is why the Government have already taken action to ensure that fuel remains affordable. In November’s Budget, we extended the temporary 5p per litre cut to fuel duty for a further five months. Additionally, we cancelled the inflation-linked increase planned for 2026-27. Our fuel duty changes will save the average motorist over £90. In 2026-27 alone, a van driver will save an average of £100, rising to more than £800 for heavy goods vehicle drivers.
Torsten Bell
I will make a bit of progress, and then I am sure I will give way to the right hon. Gentleman, who is always very enthusiastic. He did actually stand up on this occasion. That is what a learning curve looks like—it is a shame Conservative Front Benchers have not found one in 14 long years.
Torsten Bell
That was not the best; there is much more to come. I am enjoying the enthusiasm.
Sector-specific support continues for the likes of agriculture and horticulture, which retain access to red diesel, after it was withdrawn from most sectors in 2022. Our extension of the temporary 5p fuel duty cut includes a proportionate reduction for rebated fuels, including red diesel.
As the shadow Secretary of State noted, the context is that we are entering the third week of the ongoing conflict in Iran, the effects of which have spread directly across the middle east and indirectly around the world. In responding to that conflict and those effects, the Government’s priority will always be the national interest. The immediate focus is on protecting British nationals in the region, and taking necessary action to defend ourselves and our allies. That is supported by the Chancellor’s decision not just to deliver the biggest uplift in defence spending since the end of the cold war, but to approve access for the Ministry of Defence to the special reserve to deploy additional capabilities to the middle east.
Graham Stuart
I am grateful to the Minister for giving way. With the strait of Hormuz in effect closed, does that not prove the point we have been making for years, which is how important it is for our energy security to have new licences in the North sea? The Minister is known as “Torsten Tax”, so I will ask him about tax. Does he accept that not having new licences in the North sea will lose this country billions in tax revenue—yes or no?
Torsten Bell
Our position is to deliver a stable transition. That was the position of the Conservative party. It is the party that introduced the energy profits levy. [Interruption.] I will answer the question. Gas and energy from the North sea will be part of the energy transition in the UK for some decades to come, as several Members have mentioned. That is why the Chancellor met the industry in recent days, and why we are setting out proposals to allow tiebacks that will help us get gas out of the ground in the near future. Longer-term changes will take significantly longer, but none of what I have heard from Conservative Members is an excuse for rejecting the tens of billions of pounds of renewable energy investment that is important for delivering domestic energy security for this country.
Sir Julian Lewis (New Forest East) (Con)
I like the Minister very much, not least because he represents the Welsh seat of my birth and upbringing, and because I have such respect for him, I am going to try to make the point to him that I have so far made with zero success to the Chancellor of the Exchequer, among others. It is all well and good to talk about the greatest increase in spending on defence since the end of the cold war if we are comparing the post cold war period with what is—shall we say?—a quiet defence period, but we are not. What we need to spend now is not to be compared with what it was like after the end of the cold war, but what it was like during the cold war, and during the cold war we regularly spent between 4.5% and 5% of GDP on defence. If he recognises that there is some merit in that argument, could he try to persuade his colleagues to stop making that false comparison?
Torsten Bell
I thank the right hon. Member for his kind remarks, even if they were driven by geography rather than personality. I will take what I can get in today’s debate! Since we are being kind to each other, I recognise the point he makes about the significant uncertainty we face in this world today. That uncertainty always existed to a significant extent, if we are honest, and I think most Conservative Members realise that defence cuts year after year in the last decade were a mistake—
Torsten Bell
The right hon. Member is nodding. So I would offer that by way of comparison.
Torsten Bell
I will make a bit of progress, and then take some interventions.
As I was saying, we are providing additional capabilities to the middle east, but I want to be clear that the UK will not be drawn into a wider war. We on the Labour Benches have been clear about our approach. We are in the business of protecting British nationals, not of trying to deliver regime change from the air. We need to de-escalate the conflict and we are playing our part in doing so, but the full economic impact of the conflict will of course depend on its severity and duration. Recent events have led to significant increases in oil and gas prices. As of this morning, oil prices remain over $100 per barrel and gas prices at 129p per therm.
Harriet Cross
Yesterday, the Chancellor said it was great that Norway and Canada were increasing their production of oil and gas, and congratulated them doing so. And who could disagree with that—other than, seemingly, herself and the Cabinet? Does the Minister agree that, along the same lines, we should be increasing our production from the North sea and lifting the ban on North sea licences?
Torsten Bell
As I have said, oil and gas will be with us for some time. [Interruption.] Let me finish. That is why the Chancellor met the sector. [Interruption.] I hear all the chuntering from Opposition Members, but I did not hear as much chuntering when we saw a 70% fall in jobs in the North sea on their watch. [Interruption.] That is the truth of what you delivered. Now, on top of that, you are trying to double down. The Conservative party is doubling down on opposing investment in renewable energy, threatening those jobs. The Labour party believes in domestic energy security delivered by a range of sources, including the nuclear that the Conservatives failed to invest in.
Mr Speaker
Order. The Minister has been saying “you”, but I am not responsible for these things; I would not want that responsibility.
Simon Hoare
We see you as responsible for everything, Mr Speaker!
The Minister was clearly right to point out the inflationary cost pressures as a result of the Iranian situation. He might be reminded that the announcement the Chancellor made on the increase in fuel duty predates that situation. Were it not to have been made, and given the impact that we are seeing on, among other things, fuel costs from Iran, would he and the Chancellor be thinking that now is a good time to make an announcement about increasing fuel duty? The world has changed and surely this policy should change as well to reflect the immediacy of the situation.
Torsten Bell
I thank the hon. Member for his question and his invitation to discuss some hypotheticals. I would just point out that it is only next week that the policy of extending the 5p freeze comes into effect. Fuel duty will be frozen until the end of August this year. That is the position as it is. I will turn later to how we think about the future, because that is a fair question, but the policy I am talking about comes into effect next week exactly.
Simon Hoare
There are a huge number of families up and down the country who manage their household budgets incredibly tightly. They will be thinking about whether they can afford a holiday this year and so on. I appreciate that August seems a long way away, but many of those people will be sorting out their budgetary plans now. I am not certain that those “just about managing” families, as we used to call them, can wait until August for any clarity or certainty. Do not play cat and mouse with the British people; take the sensible decision now, and press pause to reflect the dramatic change in circumstances we are seeing.
Torsten Bell
I completely agree with the hon. Member that families up and down the country are worried about what they are seeing on their TV screens about the conflict in the middle east—maybe because they know people directly, but also much more universally about the effect on all of us and on their budgets—and they expect a Government who take a sensible approach, meaning that we protect household finances, which I will come to, as well as the public finances. That means taking decisions based on recognising the unavoidable uncertainty about how the future of the conflict plays out.
Torsten Bell
I am going to make a bit of progress, but I will give way soon, because Members have been very patient.
I was coming on to the fact that we are not in the business of delivering regime change from the air, but we do need to de-escalate the conflict and we will play our part in doing that.
Oil and gas prices remain below the peaks they reached in 2022 following the Russian invasion of Ukraine, but I do not want to hide the fact that, as we have just discussed, these are significant increases. Oil is up by 40% and gas prices have risen by around 64% since the end of February. The movement in energy markets we have already seen are likely to put upward pressure on inflation in the coming months—exactly as we have just discussed—but the ultimate size of the effects is highly uncertain. What is certain is that in the face of them, this Government will take the necessary decisions to help protect both household finances and, as I was just saying, public finances. I want to make it clear that, given the very real uncertainty, the policy and approach we are taking does give an assurance to households about how we will act.
Dr Luke Evans
That is good to hear. As it is under review, it sounds as if, should there be a change, the Government would look to support the British public, and I support that. Is there some kind of framework that the Government are using to make this decision? Is there a trigger point on fuel prices, or on how long petrol prices remain at that level? This relates to the previous question about budgeting. Are the Government using triggers, or is it just finger in the air and wait and see what happens?
Torsten Bell
I understand why the hon. Member is asking that. I would gently point out that the level of petrol prices today is lower than at the time of the election, when the Conservatives had a temporary 5p freeze and explicitly did not include continuing that freeze in their manifesto. I offer that by way of indication of where we are today.
We will keep working towards a swift resolution, one that brings stability back to the region, security to Iran’s neighbours and relief to households in the UK, who are understandably worried about the effect of the conflict.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
The Minister rightly talks about household budgets, but the other impact, particularly of the gas price, is industrial energy costs in this country, not least for the ceramics sector, which is gas-dependent rather than electric-dependent. When the Chancellor was asked about gas prices in her statement last week, she pivoted straight to the British industrial competitiveness scheme, which is an electrical subsidy. What is coming down the line to help the gas-intensive sectors, which currently get no relief and which are seeing, as the Minister points out, a huge increase in the price per therm, particularly for those sectors looking to renegotiate their long-term contracts?
Torsten Bell
I thank my hon. Friend for making that point. I regularly discuss exactly the kind of industries he raises today, because he is such a powerful champion on their behalf. Most firms, obviously, will be significantly more hedged than households against changes in prices, but he is absolutely right to say that the effect of energy price rises is very uneven across our industrial base. He is right to highlight energy-intensive industries and what the Government are doing when it comes to the increase in the discount delivered by the supercharger in the coming months and then the BICS in the years ahead. He is also right to make sure that we keep concentrating on this issue in the months ahead, and I am sure I will be talking to him and others about it.
We want the war to end as swiftly and quickly as possible, because the longer it goes on, the more dangerous the situation becomes and the greater the impact on the cost of living back here at home. A rapid de-escalation remains the best way to protect people from further fuel price increases—despite the bluster today, I think that is the goal of everybody sitting in this House—and that requires a return to the diplomatic process. It also means the security of vessels passing through the strait of Hormuz. On that front, the UK will play its part as the global hub of maritime insurance, but I want to be clear, given some of the things that have been said in recent weeks, that this is a complement—not an alternative—to the physical security of vessels.
As the Chancellor said following her call with G7 Finance Ministers last week, we are supporting a co-ordinated release of oil reserves. That has helped to some degree to stabilise international oil markets. We have also asked the Competition and Markets Authority to remain vigilant on price developments for essentials such as road oil and heating oil. On Friday, the Chancellor and the Energy Security and Net Zero Secretary met petrol retailers to make it clear that the Government will not tolerate anyone exploiting the current situation to make excess profits.
Dave Doogan
What evidence did the Chancellor have to suggest there was profiteering in petrol retailing? The Petrol Retailers Association rightly took umbrage at the implication of the Chancellor; I think that did not go quite the way that she thought it would.
Torsten Bell
This Government are showing that we care about the living standards of households up and down the country, and that is exactly what we should be doing. Encouraging all retailers to engage in the fuel finder scheme, which I will come to in a second, is very important. On heating oil, we had heard worrying evidence from people—I suspect the hon. Gentleman has, too, from his constituents—about the behaviour of some suppliers.
To further support competition in the market, we are introducing the fuel finder to ensure that petrol stations publish their live prices. That will make it easier for drivers to choose the lowest price. Since the beginning of February, all UK petrol stations have been asked to report price changes for petrol and diesel within 30 minutes.
Almost 90% of retailers have already registered. Last week, officials were instructed to accelerate the integration of fuel finder into major digital map applications, which will make it easier for drivers to use.
This tool sits alongside action to support households who rely on heating oil, as I just touched on. As the Prime Minister announced earlier this week, the Government will provide an additional £53 million of targeted support for the vulnerable households who would struggle to make an up-front lump sum to top up their tanks.
Dr Luke Evans
It sounds as though this support will be provided through the crisis and resilience fund, which replaces the household support fund. The problem is that many more people will not fall within that, despite seeing the price of heating oil double, if not triple—plus doubling the amount they have to order. What support is there for them? If those figures are going from £500 to £1,500 overnight, that will be a huge impact, and they will not get the £35 from the Government.
Torsten Bell
The hon. Gentleman is right, at least within England: yes, the funding will be delivered via local authorities, through the mechanism that was the household support fund, which becomes the crisis and resilience fund in a few weeks. We have written to local authorities to make it clear that they do not need to wait for the new fund to be in place and can start making commitments today. The decision on exactly who qualifies as vulnerable sits with local authorities, because one thing we have learned is that different parts of the country have different challenges on this issue.
Torsten Bell
I will make a bit of progress; I have already given way to the right hon. Gentleman.
To reflect the highly uneven geographical spread of heating oil reliance, as highlighted by lots of Members in recent weeks, not least those from Northern Ireland and west Wales, the funding will be allocated on the basis of census data, instead of via usual mechanisms.
I have focused so far on laying out the challenge facing the country and our consistent approach to this conflict, but as this is an Opposition day, it would be rude not to talk a little about the Opposition, who have displayed rank opportunism and incoherence. This week, the Leader of the Opposition has said that she is
“concerned that there isn’t a clear plan behind the strikes”,
which is the opposite of what she has been saying for weeks. She welcomed the strikes and the military action that she now says lacked a clear plan. She called for Britain to get involved in the military action that she now admits lacked clear objectives. She says that her leadership is about consistency, but, on this most important of issues, the whole country can see that she is just making it up as she goes along—a cavalier attitude without a second thought for the consequences for households here in the UK. She does not get to wrap herself up in another country’s flag and play politics with a serious conflict and then pretend she never did so once the consequences for those living in the United Kingdom became clear.
Opportunism is the word for the Opposition on fuel duty, too. For all the froth from the shadow Minister, the truth is that the previous Government did not budget for any extension of the 5p cut—they explicitly said that it was temporary. Here is the truth on the level of fuel duty: through their entire 14 years in office—
Torsten Bell
Wait for it; I am going to come to come to those 14 years. The hon. Gentleman is going to regret saying that. Through the Conservatives’ entire 14 years in office, fuel duty was never lower than it is today. In fact, it was higher than it is today for 80% of the time they were in office.
Several hon. Members rose—
Torsten Bell
I absolutely understand why the shadow Minister is looking so worked up; fuel prices matter for everyone, especially those travelling long distances. After all, it is around 270 miles from North West Durham to Billericay—once he found his new constituency, that is. I know it is called a chicken run, but I am assuming he drove.
The Opposition may not be serious, but these are serious times. The cost of living matters. In a few weeks’ time, fuel duty will be 11p lower compared with the plans we inherited from the previous Government. Our action on fuel duty will save the average motorist over £90, on top of the savings from the Government’s fuel finder scheme. We will, of course, continue to keep fuel duty under close review, but it is frozen now and will remain frozen in the months ahead.
Torsten Bell
We will continue to be responsive to a changing world, be responsible in the national interest and with the public finances, and take the necessary decisions to help families with the cost of living. That is this Government’s promise.
Madam Deputy Speaker (Ms Nusrat Ghani)
Well, it was clear that the Minister was not giving way. I call the Liberal Democrat spokesperson.
Tim Farron (Westmorland and Lonsdale) (LD)
I thank the right hon. Member for Basildon and Billericay (Mr Holden) for bringing forward this debate. It is a really important one because the impact of fuel costs—both for motorists and for those having to heat their homes—is devastating.
Over the past three weeks, people’s entire ability to budget to be able to afford to live, to buy food and to pay the rent or the mortgage has changed. It has been turned on its head. In every city, town and village in our country, everybody is affected one way or another. I do not mean to diminish the impact of fuel price increases in our cities, which has been huge; nevertheless, for people living in a city, the chances are that they work in the same city, and the chances are also that they can, if need be, leave their car at home, if they have one, and take advantage of public transport. I am very supportive of a cap on bus fares—I wish we still had a £2 cap, but the £3 cap is still a lot better than what we had in the past—but they are a fat lot of good if there is no bus to get on at all.
In rural communities like mine, people on the most modest of incomes have to own a car in order to access our economy or any kind of life at all. Somone living in Kendal might work in Grange-over-Sands, or vice versa; someone living in Ambleside might work in Barrow, or vice versa; someone living in Kirkby Stephen might have to travel 60 miles every day to go and work in the hospitality and tourism industry in Windermere or Bowness. The impact of the fuel price rises over the past three weeks is utterly devastating for these people. Diesel in Cumbria is 160p a litre—up to 170p in some cases—and petrol is near to 140p a litre. Indeed, red diesel is passing the £1 mark for the first time.
Mr Andrew Snowden (Fylde) (Con)
Like the hon. Gentleman, I am a north-west MP representing a rural constituency. Even those of our constituents who work in big suburban areas like Manchester and elsewhere still need to get to a train station, so even those who spend significant time in larger urban areas still rely on their car to be able to get to what resembles public transport to commute to and from work.
Tim Farron
The hon. Gentleman makes a very good point. That will be the case across my communities, too; many people will drive to Penrith, Oxenholme, Grange-over-Sands or Windermere to park and then catch the train to their place of work or study. These are significant costs. Of course, it is worth bearing in mind that these fuel costs will also have a significant impact on public transport providers down the line, and will make it hard for them to continue their current services. The hon. Gentleman’s point was well made and well delivered.
We are talking about motor fuel costs rising, but there is also the impact, as has been mentioned already by hon. Members, on heating oil. The costs for people heating and running their homes have been immense and are causing real hardship already. In Cumbria, 46,000 homes are off-grid. About 35% of the homes in my constituency are off-grid, with people relying on heating oil; in Kirkby Stephen, Tebay and Brough, 74% of properties are off-grid, while in Hawksford, it is almost 80%.
I asked my constituents—many of them did not need asking, I have to say—to give me their impressions and experiences of the past few weeks. It is clear that heating oil has literally doubled in price overnight, although I have heard reports of it trebling, too. Many of my constituents cannot afford to get any more heating oil until or unless the prices drop.
It is important to remember that in a community like mine, 25% of our housing stock was built before the turn of the 20th century. This is true of many colleagues’ constituencies as well. Many properties are solid wall properties, which are very difficult or expensive to insulate—a problem that this and previous Governments have failed to deal with adequately. People are therefore spending a fortune heating their difficult-to-insulate homes, and are now in a situation where they are having to spend up to three times more just to keep their homes vaguely warm.
Steff Aquarone (North Norfolk) (LD)
In my constituency there is a mother whose daughter lives with a disability and is reliant on a particular type of prescription food that has to be kept at ambient temperature. If the temperature of their house drops, the food perishes, and she cannot eat. Does my hon. Friend agree that it is not just the concern facing residents now—my constituent was prepared to pay whatever it took, but she could not secure a delivery at all—but the fear of the next crisis in the spike in oil prices? That is why we need to call for a cap on heating oil for our rural constituencies.
Tim Farron
My hon. Friend makes an excellent point. That is a reminder that people’s experiences of increased prices are myriad in type. What those people have in common is a shared and sudden hardship that forces them to make incredibly difficult decisions—or, indeed, choices if they have choices to make.
Ben Lake (Ceredigion Preseli) (PC)
The hon. Member makes an important point about the impact on rural areas. Does he also agree that we should bear in mind the consequences of this price spike on businesses? Many of the businesses in my patch are also off grid. Having gone through the winter period and perhaps hoping for some good fortune in the spring, they are now facing this big barrier. Indeed, some have already told me that they are cutting back on operations and contemplating closure because of this new pressure.
Tim Farron
Any effort that the Government make in supporting people and businesses through this process will have a medium to long-term positive impact on the Treasury: if we can keep businesses in business, making a profit and keeping people in work, those companies and employees will be paying tax and refunding much of that investment—so investment it truly is. Our amendment sets out some practical alternatives. It acknowledges the devastating impact of the Government’s decision to increase fuel duty from September, and it calls for that to be cancelled. It focuses also on the experiences of rural and other off-grid communities that have been left exposed by years of under-investment. It specifically calls on the Government to cancel the fuel duty rise, immediately to zero-rate VAT on heating oil, to develop a price cap mechanism for heating oil and other uses of energy, to expand rural fuel duty beyond the relatively small number of places in which it currently operates, and to invest in an emergency upgrade programme, so that we are not so exposed to these things in the future.
I recognise—and welcome to a degree—the Government’s announcement this week on some support for homes and businesses that are reliant on heating oil. I have done my sums and it works out at £35 per household. That is an inadequate sticking plaster. It will not have much of an impact on household finances. What we need is an energy price cap for people who live in rural communities, otherwise they will continue to believe that this Government, and perhaps others before them, do not really care very much about them. They will focus on the energy bills of other people, but not on those of people in rural communities. Therefore, this announcement does not go remotely far enough, although we are happy that the Government have at least begun to talk about the matter.
The impact of the massive price rises in energy costs—motor fuel, car fuel, heating oil and other forms of fuel—is absolutely local. It is house by house, family by family, community by community, business by business. It is bound to be observed that this has been triggered by the actions of one D. Trump in the White House. The war has entered the lives of people in Iran, and the lives of innocent people across the middle east and a range of different countries. It has also had a massive impact on the global economy. As has been said, it all comes down to who controls the strait of Hormuz, which Iran effectively does at the moment. As long as that is true, whatever the President of the United States says, Iran is effectively winning.
In the meantime, fuel prices are rocketing. Quite simply, as the International Energy Agency has noted:
“The war in the Middle East is creating the largest supply disruption in the history of the global oil market.”
That is quite something. It does not make me an enormous expert in international affairs to conclude that this was all utterly and totally predictable when Donald Trump began this war. As others have mentioned, this is about not just oil, but gas, fertilisers and petrochemicals—crucial inputs, Higher prices and increased scarcity will have a massive impact on our economy more broadly, and on the cost and availability of food production, with the result that, sadly, we can look forward to increased food prices in coming months.
My community is the most visited place—outside London—in the United Kingdom. We are home to a huge tourism economy. Some 60,000 people in Cumbria earn their living in hospitality and tourism, which is already struggling because of the Government’s national insurance rise more than a year ago. We are an economy that very much relies on small businesses. One in four people in the workforce in my constituency works for themself. Smaller businesses, which are much less likely to be able to withstand these shocks, are the backbone of our economy.
I have talked about food prices, and I am bound to mention the impact on our farmers. Let us not forget that by December this year direct payments will be over. So many people in my area, particularly those farming in the uplands of Cumbria, are on incomes that are less than the minimum wage. They seek to look after our environment, our landscape, the backdrop to our tourism economy, and, even more importantly, to feed us. The cost of their production will rise as a consequence of all these events and there will potentially be an impact on our food prices.
I mentioned the rural fuel subsidy earlier, which came about as a consequence of the Liberal Democrats’ time in government, when we were in coalition with our Conservative colleagues. Outrageously, though, it applies to only 21 places in the UK, not one of them in Wales and only one of them in Cumbria—a lovely place called Grizebeck. That means that the Government have a mechanism by which they could help rural communities, and we ask them, at the very least, to double the access and scope of the rural fuel duty subsidy right across the country—including, first and foremost, I am bound to say, in the lakes and dales of Cumbria. Everyone will be hurt by the impact on inflation—reduced demand, inequality and unfairness for those earning the least will potentially be huge.
The Government’s fuel duty rise exacerbates a problem, which has, as I have said, been created in the White House. The United States needs to fix the problem that it created. It cannot be up to others to save it from its failures to think things through. Colin Powell, a person who is perhaps wiser—I think that is fair to say—than the current occupant of the White House, once said to George W Bush that,
“if you break it, you own it”.
That was said of the war in Iraq. Surely the same can be said now to the President of the United States. I gently point out that it applies also to those in the Conservative and Reform Front-Bench teams who egged the President on in the first place.
NATO allies should not be joining Donald Trump in a war that he started without ever consulting his allies or explaining his war aims. He wants us to fall in line meekly, but we must not do so. Donald Trump still cannot articulate his endgame or what victory would look like. He went to war thinking that the Iranian regime would fall quickly—of course, it has not—and that Tehran would not attack the Gulf states or close the strait of Hormuz, which of course was always likely. Why would we align not just with such a moral outrage, but with such epic stupidity? Although I am grateful to the Conservatives for submitting a timely and important motion, we must remember that they are part of the reason that we are in this mess. [Interruption.] I will wrap up, Madam Deputy Speaker.
Meanwhile, against the backdrop of that international situation of extreme danger, my constituent in Kirkby Stephen fills up with diesel that costs 25% more than it did three weeks ago. Her home is cold, because she cannot buy any more heating oil, as it has gone up threefold in the past three weeks. She travels to Windermere to earn the minimum wage, and at the end of the day it is barely worth the bother. Do not tell her that politics does not change things; it really does. Our amendment aims to change things for her for the better.
Harriet Cross (Gordon and Buchan) (Con)
It is great to be able to speak today in this important debate. I am glad that this is one of the topics that the official Opposition, led by the Leader of the Opposition, have brought to the House, because fuel duty impacts everybody. It impacts every family, every household, every business, hauliers—everywhere we go, everything that we see is impacted by fuel duty, and that is no more obvious than in rural areas.
People in our rural communities rely on cars more than anywhere else. We cannot rely on buses, because they are not reliable. We cannot rely on trains, because half of the time they are not there. We cannot rely on tubes, because we do not have any near us. Cars are the lifeblood of rural communities. We would be stuck without them, and therefore they are vital. The majority of the public know that too. There are 36 million petrol and diesel vehicles in the UK, and every single one of them will be taxed when fuel duty goes up. Fuel duty is a tax on every single vehicle, and all those vehicles are driven by somebody, so this is a tax on everybody.
Rural communities will feel this change so much more because they are so much larger. The best way to demonstrate that is to compare the size of constituencies. My constituency in Aberdeenshire in north-east Scotland is large; it is nowhere near the largest Scottish constituency, but it covers 2,076 sq km. That is larger than the combined total of the constituencies of Treasury and Transport Ministers multiplied by three. Indeed, if the large constituency of the Under-Secretary of State for Transport, the hon. Member for Selby (Keir Mather), is removed from that equation, the total combined constituency area of the Treasury and Transport ministerial teams is 380 sq km. I assume, therefore, that it is no coincidence that they do not appreciate how important cars are for getting around large constituencies and how much increasing fuel duty will impact rural constituents.
While distance is important, price is also vital. The “Fuel Finder” tool that has been created is helpful, not least because it tells me that in my constituency fuel is on average 147p per litre, compared with 139p per litre in the constituency of the Parliamentary Secretary to the Treasury. We are already paying more in rural constituencies, and we already have to drive our cars further, so we are filling up our cars more often and at a higher price. Fuel duty rises impact us more than those living in urban areas.
This is a point I keep coming back to, but rural communities do not have a choice—we have to drive. We have to drive to get to work, to get children to school, to go to doctors appointments. To use an example, my constituency has seen many bank closures, meaning that constituents in Ellon have to drive to Inverurie in order to bank. That is a 28-mile round trip—just to bank. That distance is further than the breadth of many Members’ constituencies, east to west or north to south.
It is not just fuel duty that the Government are targeting. At the Budget they announced their new 3p per mile charge for electric vehicles. Constituents of mine who live in Huntly and commute to Aberdeen to work, often in the oil and gas sector, travel 17,800 miles a year—based on their working five days a week, 46 weeks a year—just to get to work. The pay-per-mile system that the Government have brought in will mean that those constituents pay £535 a year just to get to work in their electric car. Perhaps Treasury Ministers cannot imagine having to do a 77-mile round trip to get to work, but that is what my constituents do and they are being penalised for it.
When the Treasury Front Bencher winds up, I would be grateful for confirmation that pay-per-mile for electric vehicles will not be a gateway to pay-per-mile for petrol and diesel vehicles. That would cripple rural communities, rural families, and rural businesses. It is a slippery slope that the Government have started on with EVs, and if the system progresses to cover petrol and diesel vehicles, it will be a hell of a lot worse for a lot of people.
We all know that supply is just as important as price, if not more important; we have been talking about it a huge amount since the events in Iran. People panic when they get to the pumps because they see the price going up, but they will panic more if they get to the pumps and there is no supply at all. I am not saying that we are there at the moment, but we need to consider how important supply is.
Joe Robertson (Isle of Wight East) (Con)
My hon. Friend is giving a characteristically well-informed speech. Might she reflect on the cost of moving around by car for the Prime Minister in his Holborn and St Pancras constituency and the necessity to move around by car for his constituents compared with mine in the Isle of Wight and hers in Gordon and Buchan?
Harriet Cross
Absolutely; I think a lot of us can relate to the fact that in some constituencies people have no choice but to use their car. They will use their car and keep using it, because they have to, and if they are using their car, they need to fill it. Therefore, they need petrol and diesel at affordable prices, and increasing fuel duty is making that less affordable. Fuel duty makes up 38% of the cost of a litre of petrol. The wholesale price is 33%, which feeds into it, so any increase in fuel duty makes prices more and more expensive. The decision to do that is completely under the control of this Government.
Refining is a vital part of the production of petrol and diesel for our vehicles. The UK has a very good record on refining, as we are net exporters of petrol from our refineries, but in the last two years alone, two refineries—a third of the UK’s refineries—have been lost, and our capacity is going down. That is not least because of the carbon tax, which has nearly doubled under this Government. It has made refining in the UK more difficult, putting industries under pressure and ensuring that the de-industrialisation of the UK under this Labour Government continues.
Members need not look any further than the oil and gas sector, particularly in north-east Scotland, to see the de-industrialisation of the UK in action. The coherence of this Government’s oil and gas policy is non-existent. They know that we need oil and gas for years to come, and they say that we need oil and gas for years to come, yet they do not want British oil and gas for years to come. We have the largest tax on any mature basin, which this Government extended and increased in their first Budget. They have banned new licences, meaning that reserves will be left under the North sea. Norway will then drill those reserves, and we will import from Norway. There is no coherence in their strategy.
As a result of the ban on new licences, we are also exporting jobs. The skilled workers in the oil and gas sector who produce our oil and gas and contribute to our fuel security will move abroad. They have the skills and are valued workers, yet other countries value them more than we do in this country. The Government’s policies show that. One thousand jobs a month are being lost, and billions in tax revenue is being lost. Billions in investment is being lost, which I know the Treasury Front-Bench team know very well following their recent meetings with the sector. The Government—either because of their own ideology or the one being imposed on them by the Secretary of State for Energy Security and Net Zero—do not want to use our own natural resources. They would prefer to import, at huge financial and environmental cost and at the cost of work and jobs, in order to satisfy themselves that they are reaching a target that they imposed on themselves.
Some 70% of the UK’s energy still comes from oil and gas, and it will do so for many years to come. Electricity, which is the power that the Government refer to in their 2030 target, makes up only 20% of our energy. In reality, the vast majority of the energy that keeps this country going and powers the UK comes from oil and gas. Some 50% of the gas that we use every day comes from the North sea. Shutting down the North sea impacts our fuel security instantly and into the future, and it will keep doing so.
There are enough reserves in the North sea with the correct fiscal and regulatory conditions to support British energy security, but this Government have decided that they do not want them and would prefer to source oil and gas from elsewhere. We heard that yesterday from the Chancellor herself, who was delighted that Norway and Canada have increased production. Why would we not do the same? We can do the same. Why are we still waiting for Rosebank and Jackdaw to be approved? Why are we sitting on those applications? It makes no sense. All of these decisions affect our fuel security and the cost of living for households. They affect the amount of supply we have for all the things that we use energy for, yet this Government are happy to forgo that just for their headline.
I am delighted that we are discussing fuel duty for our rural communities and businesses, but this debate also shines a light on the vital importance of our oil and gas supply into our refineries and our cars and vehicles. That is why I am delighted to support the Opposition’s motion today.
Simon Hoare (North Dorset) (Con)
It is a pleasure to follow my hon. Friend the Member for Gordon and Buchan (Harriet Cross), who spoke with her usual passion on behalf of her constituents and a sector that is important to her local economy, and with the depth of knowledge that the House has come to expect from her. She raised the important theme—I touched on it slightly in an intervention on the Parliamentary Secretary to the Treasury, the hon. Member for Swansea West (Torsten Bell), as he opened the debate for the Government—of the Government’s lack of consistency or common sense as a starting point, and of fleetness of foot in responding to events as they materialise.
My hon. Friend referred to the absurdity of the Government saying in one breath, “As we transition to a renewable, clean, green energy source, we will continue to need oil and gas in our economy, but we would prefer to buy it from a third country’s production even though we have it literally on our doorstep.” There is a lack of imagination and, as I said, fleetness of foot as the Government respond to pressures in the changing landscape. If the Exchequer Secretary to the Treasury will indulge me, I invite him to consider what he would be saying about the proposals announced in the Budget to increase the main fuel duty rates if he were on the Opposition Benches or at the Opposition Dispatch Box rather than speaking for the Government.
The point that I made to the Parliamentary Secretary to the Treasury was a simple one. I did not support the Chancellor’s announcement on fuel duty, but she had a common-sense approach to it and was perfectly within her rights as Chancellor of the Exchequer to make that rate announcement. It predated the events in Iran. I ask the Minister to consider what he would say if he were on the Opposition Benches and he faced intransigence from a Government who said, “We understand that costs are going up. We understand the volatility of the market. We understand the enormous pressures being placed on all households—in particular those with low incomes, the elderly, the vulnerable and the just about managing—but we are still going to plough on.” If they said that rather than, “We still want to increase fuel duty, and we may very well do so in the future, but now is not the time. We are going to pull the plaster off this thing and reverse the announcement. We are not going to increase fuel duty, because the tail of this fuel pricing crisis will be quite long, irrespective of whether the situation in Iran and the strait of Hormuz comes to a conclusion in the foreseeable future,” I think he would be jumping up and down, pulling his hair out and accusing the Government of being tin-eared and tone deaf.
I hope that the Government Whips get the timing of this week’s debate right so that we do not have the ignominy of the Minister wishing he had spoken for a further 20 minutes and people dramatically falling ill in the Lobby but then miraculously, at the stroke of 7 pm, suddenly rising Lazarus-like from near deathbed experiences to get on with their parliamentary business. When he comes to sum up, I hope that he will reflect on the need for a rapid response in real time.
On that theme, may I address one aspect of the amendment in the name of the Prime Minister? As the Minister probably knows, last week there was a hugely useful meeting with the Minister for Energy and the Financial Secretary to the Treasury, Lord Livermore. Many of us who attended were pleased that it had taken place. We took away a variety of responses, but it certainly seemed that the Government were getting it. However, there is the perpetual repetition of the point that they are continuing to work with the Competition and Markets Authority on regulation of the heating oil market. That is a long-term solution; it will not solve the problems today. I do not think that is a crutch on which the Government can rest and presume that the House and our constituents will be satisfied. There must be two workstreams here, with future regulation in the medium to long-term and immediate help in the here and now.
Fuel Finder, which is referenced in the Prime Minister’s amendment, can be useful. However, the Minister will probably know, or will have heard, that in rural areas we do not have a petrol station by every village green or on every corner, and in my constituency—I will deal in miles rather than the modernity of kilometres, as my hon. Friend the Member for Gordon and Buchan did—which is about 440 square miles, people are having to drive a 5, 10 or 15-mile round trip to fill up their cars. Therefore, Fuel Finder—welcome as the idea that sits behind it is—is really only of use to people who have a larger number of fuel stations where they can fill up their vehicles in close proximity to where they live or work.
I want to say a word or two about heating oil. Thanks to figures produced by the House of Commons Library referencing the census data of 2021, we know that about 7.1% of households in the south-west of England use heating oil; the UK average figure is 4.9% and the figure for the North Dorset constituency is 13.71%. I understand that those figures do not include households using liquefied petroleum gas—they merely include traditional heating oil—and they certainly do not include the vital requirement of red diesel for the farmers of North Dorset.
Not increasing the main fuel duty would help everybody in our country, but it would disproportionately benefit those whom we referred to at a certain time in our recent political history as “just about managing”. Those are not households that are supported by a raft of welfare state interventions and benefits, and they are not people who are disabled and unable to work. They are people who are doing their best and doing their bit—often couples working more than two jobs just to keep the roof over their head and food on the table. I am certain that when one is in the Treasury dealing with telephone-number sums day in and day out, an increase of 5p per litre does not sound like a vast amount, but when the household budget is so finely balanced that a couple of quid here or there makes all the difference, those 5p’s add up.
I do not want to turn this into a rural versus urban debate, but it is important for urban Members of Parliament to hear about the reality of living in rural areas. We are lucky to live in rural areas—we have beautiful environment, lovely countryside and a slower pace of life—but every economist recognises that the cost of delivering services, the cost of produce and the cost of transport is greater in rural areas. That is principally for two reasons that result from sparsity of population: greater distances must be travelled to access them, and there are higher costs in getting to those rural markets because they are further away from the nexus of the transportation networks. All those things have a knock-on effect. If there was a choice and people could say, “Oh, I could jump on a tram, a tube, a bus or a light railway and forgo using my car or my van,” of course they would do so as a way of saving additional expenditure.
It is depressing that although I think I am right in saying that at no time since 1966 has the Labour party in government had a higher number of Members of Parliament representing rural constituencies, unless those MPs are in deep camouflage this afternoon, they appear to be showing what I would describe politely as precious little interest in the welfare of their constituents. Maybe that is because they realise that those on the Treasury Front Bench have almost given up on rural Britain, probably promoted by a lack of knowledge and understanding, and certainly by a lack of curiosity to find out anything about what it is like to live in our rural communities. Maybe they have given up trying to persuade those on their Front Bench of the need for a change of heart. On the Conservative Benches, and on those of the other Opposition parties, we will not give up advocating the cause of our rural communities.
Wendy Morton (Aldridge-Brownhills) (Con)
My hon. Friend is making an important point about rural areas, but those of us who do not represent rural constituencies—mine is neither semi-rural nor urban—face exactly the same issues as the rural areas. The increase in fuel prices is impacting on everybody in their daily lives and most people are now thinking, “Enough is enough”. Does he agree?
Simon Hoare
I do. My right hon. Friend is right to point to the universality of the negative impact of the proposal. As a good Yorkshirewoman who I know is always persuaded by the validity of common sense, I hope that she will accept the point that when everybody says that the impact on rural communities will be disproportionately felt, that is amplified when one recalls that, on average, the annual income of people living in rural areas is lower than that of those who live in urban or suburban areas.
Joe Robertson
My hon. Friend is right to point out that there are only two Labour Members of Parliament sitting on the Government Benches for this debate on the increase in fuel duty. Does he think that the other 400 Labour MPs are right now in a huddle, in a darkened room with the Chancellor, lobbying her to reduce that tax and to freeze fuel duties, or does he think that they might have gone home?
Simon Hoare
I would probably suggest to my hon. Friend that a lie-down with a cold flannel in a darkened room might be a good idea for him if that is what he thinks they are doing. I think that they have broadly given up. Let us just make the point. I do not want to rub Government Members’ noses in it, but with the exception of the Whip, who has to be here, the Parliamentary Private Secretary, who feels that she has to pass important pieces of paper from the officials’ Box to her Minister, and the Minister, who has to be here whether he likes it or not, therein ends the interest of the governing party on this particular issue.
Let me amplify a little further my point about necessity. North Dorset is predominantly an economy of micro and small businesses; a lot are family-owned, many are not. Medium-sized enterprises are often looked at as something to be aspired to, but it is predominantly micro and small. There are also a few large businesses such as Dextra, based in Gillingham in my constituency, and Hall & Woodhouse, a brewery that will be known to many colleagues across the south-west and the south—companies that I would classify as the larger employers of North Dorset—and they are seeing their costs go up.
I know that some have used the phrase “white van man and woman”—I think of the Chair of the Foreign Affairs Committee, the right hon. Member for Islington South and Finsbury (Emily Thornberry), who once said it with a bit of a curl of her lip and a sort of snarl in her voice. I do not say it in that way. I admire white van man and woman, who have got off their backsides and set up a business, entrepreneurially, maybe employing one person. They provide vital services to communities and need that vehicle to either go and pick up kit and product so they may fulfil their jobs, or to travel many miles to their work to put food on their table. They are going to be hit.
I think of my farming vets in North Dorset, who have to travel distances to attend to animal welfare issues. My constituency has a very high percentage of retired people—the highest in the county of Dorset—and I think of the carers who are having to use their cars to travel, to visit, to help and to make sure that those people are okay. I also think of my farmers, who, as the Minister will know, play a vital role in delivering not just environmental management but, crucially, food security. They are seeing prices rise as a result of current pressures, not just for the fuel that they use but for the fertiliser that they have to buy.
Wendy Morton
My hon. Friend eloquently sets out that this impacts just about everybody in their daily lives, up and down the country and across communities. Does that not highlight why we took great efforts to freeze fuel duty when we were in government? I would even go so far as to say that those on the Conservative Benches are the friends of the motorist, in contrast with those on the Labour Benches who simply see the motorist as a cash cow.
Simon Hoare
My right hon. Friend is right. It is important to relitigate this point: we froze fuel duty not merely because we could but because there was a reason so to do. It is why—I say this as a former Local Government Minister—we enhanced and protected and preserved the rural services delivery grant to reflect precisely the additional costs for local government of providing services in rural areas. Again, that was not just slashed but scrapped by the Government in the local government settlement.
There are also the costs of the school run, and I am going to have to declare an interest as a parent of three daughters still at school. When my wife takes our three girls to school, it is a 22-mile round trip from home to school and back, and then again in the afternoon. Forty-four miles for no other reason than to transport three children to school to get an education and to fire up their ambition and aspiration. Hundreds of parents across the constituency do exactly the same, and they will be impacted negatively as a result of this increase.
I think as well about those who are trying to get to hospital appointments. I live relatively close to the West Dorset border, but if a constituent living close to me has to go to Dorchester hospital, they perform something like a 40-mile round trip just to get to a hospital appointment. This is not just a tax increase in isolation; it comes on top of the other inflationary pressures that the Government have authored as a result of national insurance and business regulation and so on making things much harder for businesses, which means that all the costs of those in the business sphere will, by definition, be passed on to customers. I really hope that people do not decide to miss that hospital appointment, not because they no longer need it but because they feel that they cannot afford to travel to and from it.
The Minister does not need me to tell him of the acute pressure that our hospitality sector is facing across the whole UK, and rural areas in particular. Pubs face great pressures, and many in the North Dorset constituency are closing, regrettably. If people cut back on their travel because petrol or diesel has become too expensive and they have reduced their travels to merely just what they would deem to be the absolute essentials, then leisure and relaxation purposes will be eradicated from their menu of choice. That, again, will have a negative pressure on a sector already hit.
I always like to try and wind you up, Madam Deputy Speaker, by saying something like, “To bring my opening remarks to a conclusion”. You will be delighted to know, however, that I am bringing my overall remarks to a conclusion. Sometimes Governments move slowly because the process requires them to. Sometimes, as we have seen in other circumstances, where they have a will, Governments can move incredibly quickly. If the PPS could leave her Minister alone for just a moment, I would appreciate it if he listened to this.
Simon Hoare
This is a point I made to the Parliamentary Secretary to the Treasury. All these increases—in council tax, domestic and transport fuel, food prices and so on—are putting pressure on so many household budgets. The Minister knows that; he will see the data from his officials in real time. Families need to make plans—can they afford that holiday during the school summer holidays or to travel to visit a relative later in the year? I am sure that to the Treasury and to the broad, big-picture statistician, these small matters, individual cases, vignettes and cameos of people’s lives are slightly a nuisance, but these are real lives lived on a daily basis by our constituents.
It would be indefensible, illogical and an act of self-harm for the Government to proceed as the Chancellor suggested that she would and increase main fuel duties from 1 September. Some tactical guy may well be looking at a whiteboard in No. 10, desperately trying to fill in the late summer grid when the House is not sitting, saying, “I know, in the third week of August, we will mention that we are not going to do it.” I can understand that in public relations or media management terms, but I say to the Minister, who is a common-sense man—I hope that he will get the common sense of this—that this has all the signs and hallmarks of an inevitable change of heart from the Government. It is not a question of whether but when. He will be sustained—I am sure there will be other calls on him to spend it—by a massive increase in VAT from heating oil from domestic uses over the next several weeks. If we can agree that it is a question of not whether but when, from the bottom of my heart, on behalf of my hard-working constituents of North Dorset, my farmers and those micro and small businesses, I urge the Minister to recognise the common sense, the necessity and that the landscape has changed in just those few short weeks since the Budget was delivered, to make that change and to announce it soon.
Joy Morrissey (Beaconsfield) (Con)
It is a pleasure to follow my hon. Friend the Member for North Dorset (Simon Hoare), who eloquently championed his local area and covered every point that we could possibly raise—I shall follow humbly on his coat-tails.
Fuel duty is a war on the motorist. It is an attack on hard-working families who have scrimped and saved to drive their child to that special holiday or even to do the school run each day. This tax is regressive. It will hurt normal, hard-working families across Beaconsfield, Marlow and the south Bucks villages. It will also hurt small and medium-sized enterprises, care workers and all the key workers who have to drive from outside Buckinghamshire to work in the area. We have care workers who come from other counties to work in Bourne End, Wooburn and Marlow because the cost of living is so high. That extra driving, that extra cost on their transport, will be devastating to our local care-working community and to those who provide vital services, such as our firefighters and police officers, who often have to drive to the fire station or police station where they are based. That extra cost is the difference between a family making it each month and slightly going under. That is who we are speaking for today: the people who are paying their taxes, working hard and wanting to do the right thing but are being punished by this fuel duty increase.
My constituency is also impacted by rises in off-grid heating oil prices. I myself have off-grid heating oil, and many of my constituents in Dorney, Wooburn, Bourne End, Flackwell Heath and Iver are impacted by price increases. Although we are near London, we are actually very rural. I have more pensioners per capita than pretty much anywhere else—you might be the No. 1 winner, Madam Deputy Speaker, but I would come second. This extra cost will push my pensioners into poverty. They are barely making ends meet right now. They are humbly going about their business, but they all need transport as well. We have poor transport links so people need to use their cars, and my pensioners will be adversely affected by this fuel duty increase. It is incredibly unfair that the increase is coming in now given that world events are causing oil prices to increase anyway, so families, workers and the taxpayer will be further punished.
It would be hard to have this debate without mentioning my right hon. Friend the former Member for Harlow, Robert Halfon, who led the charge on fuel duty. For years, he was the passionate voice making this point clear across the House: high fuel duty taxes are regressive because they affect working people the most. They are a brake on economic growth. We all saw the golden moment on Sunday morning when the harsh inconvenience of the facts hit the Secretary of State for Energy Security and Net Zero: that 38% of the cost of petrol is down to fuel duty, a tax entirely in the hands of the Government. This Secretary of State, who could power the entire country with hot air, seemed to get the message slowly but surely, and there is no problem to which the answer is not a faster and more ruinous race to net zero, putting ideology ahead of working families. To govern is to choose, and this Government always choose the most damaging economic pathway for families.
Katie Lam (Weald of Kent) (Con)
My hon. Friend is giving an excellent speech as usual. Is she aware of analysis from the Taxpayers’ Alliance that says the average household will pay £40,000 in fuel duty over a lifetime under the Chancellor’s plans? That is several thousand pounds more than the median disposable income for a household. Does she feel, as I do, that this is an unsustainable burden on people who are already struggling to get by?
Joy Morrissey
It is a shocking burden and one that many people and hard-working families will not be able to bear. I am often told by the London elite that people need to switch to electric cars and do all these other things, but many people cannot afford an electric car or the cost of electricity, or even to put fuel in their petrol car. Families will be at breaking point, and they have no alternative to taking their child to school or the doctor. That extra burden can push a family completely over the edge.
We need to make our economy competitive again. We need to look at ways to make energy and fuel affordable for everyone. Working people are being saddled with higher costs and taxes while more money is being pumped into benefits Britain because of the weakness of a Prime Minister without a backbone. It is time to put working people first. It is time for another Government U-turn.
James Wild (North West Norfolk) (Con)
Madam Deputy Speaker,
“In these difficult circumstances, while the cost of living remains high and with a backdrop of global uncertainty, increasing fuel duty next year would be the wrong choice”—[Official Report, 30 October 2024; Vol. 755, c. 817.]
Those are not my words, as it happens, but I agree with them. In fact, that was what the Chancellor said in her first Budget. Having increased taxes by £40 billion in that Budget, people might have thought that that would be the end of the talk of fuel tax hikes. However, this Government’s approach is all about higher spending, taxation and borrowing, so it was not that surprising when, in her second Budget, the Chancellor set out plans to scrap the 5p a litre cut introduced by the Conservative Government in 2022—a cut, remember, introduced in the wake of price increases after Putin’s illegal invasion of Ukraine. We introduced that cut to recognise that, for rural communities such as mine in North West Norfolk, a car or van is a lifeline, not a luxury. They connect farmers to markets and help children get to school, as my hon. Friend the Member for Beaconsfield (Joy Morrissey) said. They allow people to get to work or to health appointments, and they keep rural enterprises in business. Every penny added to the cost of fuel has a bigger impact in areas where public transport is limited and journeys are longer.
This would be the first fuel duty rise for 15 years, taking £3.6 billion from hard-pressed motorists. Unless Labour Members support our motion, that tax increase will take effect from September this year, and the average family will pay £150 more a year. The Road Haulage Association estimates that the increase would add £2,300 a year to the operating costs of an HGV. It is little wonder that it described the measures as a “hammer blow” for many small businesses.
It gets worse. Labour Members often like to talk about the past 14 years of Conservative Government, but one thing we did over those 14 years was to freeze fuel duty. From next April, this Government will end that freeze, and inflation-linked rises will follow, making the end of support for motorists that is calculated to have been worth £120 billion over the period of Conservative government. Through this debate, the Conservatives are once again speaking up for the British people. My right hon. Friend the Leader of the Opposition challenged the Prime Minister about fuel duty increases last week, but he wanted to talk about anything but that topic—as he did again this week. Under pressure, he is beginning to shift his position. He has said that the increase is now under review. Where is his leadership? It is utterly lacking.
And where are Labour Members? No Labour Back Bencher is prepared to stand up and speak in this debate. Even the hon. Member for Rugby (John Slinger) is notable by his absence. They will be whipped today to vote against our motion, as they were on the family farm tax, the winter fuel payment cuts, a national inquiry on grooming gangs, and more. Given their absence, I suspect that they sense another U-turn is coming. The Minister will once again have to defend a policy that he knows will probably be changed again, like the family farm tax, and the 3,000% increase in the landfill tax, which the Government also ditched under pressure. The Prime Minister is too weak to make a decision. Now he wants to go up to his study and read more papers alone, ponder it and think about what he should do.
People increasingly feel that they are working harder and getting less, and that too many people are signed off on sickness benefits. The Government are making their life harder. On Labour’s watch, inflation has increased and unemployment is rising month after month. Labour Members’ constituents will see that, when the Government had the opportunity to stand up for families who rely on their cars, for the white van man, and for people in rural communities, they utterly failed to do so.
When the Chancellor was asked whether she would reverse this fuel tax hike, she said something very revealing:
“I’m very loath to spend Government money on something that the market should be doing”.
Government money? There is no such thing. That is taxpayers’ money. This Government think that everyone’s money belongs to the state, and people should be thankful to keep some of it. That attitude explains Labour’s £66 billion of tax increases to fund higher welfare spending, it explains the Government’s failure to control spending and live within our means, and it explains why the tax burden is at a record high and will only increase.
The impact is evident in the latest British social attitudes survey. Support for higher spending and taxation is falling, while support for lower taxes and lower spending is growing. That is the approach that the Conservative party has set out. We would make £47 billion of savings in public spending, including £23 billion in welfare—the Minister can have those ideas for free. We would use half that sum to reduce the deficit, and the other half to get the economy growing by scrapping stamp duty, and scrapping business rates for 250,000 leisure, retail and hospitality businesses.
The Government are putting up tax and making prices rise at a time of growing uncertainty. That is the wrong choice. That is why I will vote to ease the burden on British motorists and against Labour’s fuel duty hike.
Peter Fortune (Bromley and Biggin Hill) (Con)
My constituents have borne the brunt of Labour’s slew of anti-motorist policies. The impending rise in fuel duty is yet another attack on Bromley motorists. Some 80% of households in Bromley and Biggin Hill have at least one car or van—significantly higher than the Greater London average—and driving is often a necessity for my constituents, particularly in Biggin Hill, where public transport is unreliable.
Driving charges in London can now cost up to £40 a day, but it is even more for van drivers. That is a direct result of the policies of the Labour Government and Sadiq Khan. A rise in fuel duty will increase that cost further. In April last year, Sadiq Khan imposed a new toll on the Blackwall tunnel. For car drivers using it at peak times, the toll is £8 a day for a trip across the river and back. For van drivers, the bill is £13. The toll also means that there is now only one free crossing east of Tower bridge, at Rotherhithe. That comes on top of Labour’s expansion of the ultra low emissions zone, and the congestion charge, fuel costs and parking charges. It is becoming simply impossible for people to drive to work in London. That affects everyone who needs to drive, from tradesmen to NHS shift workers.
When I was a London Assembly member, I worked to expose Mayor Khan’s preparations for road pricing in London, which London Centric fully exposed late last year. Under Labour’s plans, motorists could be charged 40p per mile for driving in outer London, 60p per mile in inner London, and £2 per mile, with a £5 fee, for central London. The mayor has repeatedly denied that he plans to introduce such pay-per-mile pricing, but the Government’s decision to introduce a pay-per-mile tax on electric vehicles is exactly the sort of cover that he needs to introduce it. I can reassure my constituents that I remain steadfastly against pay-per-mile pricing.
Naturally, my constituents were furious to hear the Chancellor announce that, from April 2027, the fuel duty freeze, which has been in place for 16 years, will be scrapped—along with the 5p cut that the previous Government put in place—and that fuel duty will begin to rise with the retail prices index. As prices at the pump spike as a result of the conflict in Iran, the argument for retaining the fuel duty relief introduced by the previous Government, to support cash-strapped motorists, is even stronger.
In Bromley and Biggin Hill we do not have the London underground or the docklands light railway, and Biggin Hill does not even have a railway station, so people are highly reliant on cars. The Labour party, here and in City Hall, needs to understand that. The Government and the Mayor of London must end their war on motorists, and scrap their fuel duty rise and any plans for further attacks on motorists, before it is too late.
Siân Berry (Brighton Pavilion) (Green)
Our current and persistent reliance on oil for transport, rising costs as a result of instability in the middle east, and the ongoing fuel duty freeze, all have consequences for people who use any form of transport in their daily lives. I agree with the Government—and with the many Back Benchers who have joined in supporting them—that it is far too soon to consider the Conservative motion’s demand for further multiple and ongoing freezes.
The fact remains that ending the conflict in the Gulf and the wider middle east is the best way to ease fuel market price rises. The risk of profiteering by fuel providers is a far greater threat to household budgets than fuel duty collected for the public purse. The Conservatives should consider the consequences before offering their support for any more of President Trump’s appallingly badly thought-out decisions.
Dr Luke Evans
At what point would the Green party feel that we should step in to support those in rural communities? Green Members often say that the Government need to provide more support, but if we cannot de-escalate because this is not our war, how can we support constituents in Hinckley and Bosworth, in the hon. Lady’s constituency, and up and down the UK?
Siân Berry
My speech will continue to put the case for alternative interventions that will help everybody in every family in the constituencies mentioned.
Campaign for Better Transport has pointed out to the Chancellor that the total cost of cancelling all the planned increases to fuel duty in line with the retail prices index since 2011 has brought real-term cuts for motorists for 14 years, and cost the Treasury a cumulative £133 billion between 2011-12 and 2024-25. The additional 5p cut, meant as a temporary measure when introduced five years ago, has alone cost £13 billion since then.
The fuel duty freeze has been regressive. It has helped the richest tenth of households save nearly three times as much as the poorest tenth. The fact remains that the poorest people, who can afford no holidays whether or not the Government agree to this motion, are not driving or owning cars. Yet through all this time the cost of bus and rail travel, upon which those who cannot afford to own a car rely, has continued to rise.
Adam Dance (Yeovil) (LD)
I completely understand what you are saying about public transport, but in rural communities, such as mine in Somerset, there is no public transport, so how can someone get to college? How can someone get to work? How can apprentices actually get a job? What you are saying is great, but that is a 10-year plan. We need action now.
Adam Dance
I apologise for saying “you”, Madam Deputy Speaker. Does the hon. Member agree that that plan is for the next 10 years? We need change now. We need fuel duty sorted out now.
Siân Berry
I have not yet outlined my plans; I have merely complained about the rising cost of bus and rail fares that has accompanied continued freezes in fuel duty. I will move on to my next point.
I am very aware of the manospherical gender ratio there has been in the Chamber throughout the debate, and that is pertinent to this point. Hon. Members must remember that, in any given family with a car who are just about managing, the poorest and most disadvantaged members of that family will most likely be the spouse and children of the main driver. Those people, in any part of the country, including in rural areas, often have little or no access to the basic mobility that a car can provide. They are dependent on good public transport services—often absent. They are dependent on safe streets—often absent. They are dependent on transport services to access their jobs, daily lives and essential services when the car is in use by the main driver. Members should not forget that.
Several hon. Members rose—
Dr Luke Evans
As the hon. Lady rightly points out, if someone is using alternative transport, such as buses, they are still affected by fuel duty—even more so. On top of that, the Government have already increased the cost of a bus ticket by 50%, so her argument does not hold water.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. If multiple Members are seeking to intervene, please indicate whose intervention you are taking. It makes it easier for the Chair to know whose name to call.
Siân Berry
My apologies, Madam Deputy Speaker. I confess that I am not used to being intervened on in this fashion as I am such a minority in the Chamber, but someone has to make these points and I will continue to do so. The point about buses is well made. We need bus services and we need controls on bus fares, which we did not have until recent years. These are ongoing injustices that have compounded over the years, while people buying fuel from the pumps have been somewhat protected. But I am not saying there are easy answers.
Greg Smith
The hon. Lady has potentially misunderstood the intervention from my hon. Friend the Member for Hinckley and Bosworth (Dr Evans). She is making the case, perfectly rightly, for better public transport in this country, but bus companies and train operators running diesel trains—of which there are still a number—pay fuel duty, too. If fuel duty goes up, that will impact fares.
Siân Berry
We need more robust interventions on fares as well, and we need much more help for bus companies to be able to switch to electric vehicles and to electrify their fleets. I raised many of those points on the Bus Services Bill Committee. I shall now give way to the hon. Lady.
Helen Maguire (Epsom and Ewell) (LD)
We know that Trump’s illegal war in Iran has driven up global oil prices. To give an example, just yesterday I visited Edward Thomas & Son, a coach company in Epsom and Ewell. Last Thursday, it was forced to accept an unpriced oil delivery for its regular order of white diesel at £31,082 for 18,000 litres. In February, the same order was £23,614. That is almost a 30% increase. Ninety per cent of its work is helping children get to school, go on school trips and so on. Does the hon. Member not agree that this is just unacceptable? These are people trying to go about their day-to-day lives and just get to school.
Siân Berry
I have incredible sympathy for the people whose cases have been outlined in this debate. I am setting out a case for action that is going to make a difference, including de-escalating the conflict in the middle east, which the hon. Member for Hinckley and Bosworth (Dr Evans) briefly supported in his intervention.
I will move on to the alternative plans. Transport & Environment recently reminded us in its briefing, ahead of the spring statement, of the investments and initiatives that are really needed to help people in transport poverty. The Social Market Foundation has pointed out that despite over £100 billion being spent on cuts and freezes to fuel duty, it has made little impact on transport poverty. We have to find ways that are better value for money. Transport & Environment has suggested salary sacrifice, public transport travel cards, reinstating £2 bus fare caps, and, in the current context, targeted payments for vulnerable people and direct support for small businesses, sole traders and low-income households. That would ensure that help reaches those most exposed to the energy price rises, rather than repeating the regressive tax cuts that have taken place.
Catherine Fookes (Monmouthshire) (Lab)
In Wales, it is fantastic news that the Welsh Labour Government have put in place a £1 cap on bus fares for young people and a £3 fare for all people over 18. Does the hon. Lady agree that that is a fantastic use of funding by the Welsh Labour Government?
Siân Berry
I agree that those are good initiatives. I also celebrate the initiative of the Scottish Government, led by the Green party, to make bus fares free for people under 22. Young people desperately need that support because they rarely have access to the family car, as I mentioned.
All these interventions represent good value for money. This month, analysis by the Climate Change Committee has reminded us that we can significantly reduce the UK’s exposure to volatile fossil fuel markets if we just think a little further into the future and get things done. The Committee estimates that the transition will cost around £4 billion a year to make our climate targets. That is the cost of one oil shock like the one we are experiencing now, but it would deliver huge benefits, including resilience, the next time this happens, and we can predict that it might.
Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)
I thank the hon. Lady for giving way—I thought I would give her some further relief from the interventions from the manosphere on the Conservative Benches. She is talking about the importance of investing in clean energy to make our country more resilient and to do the right thing for the planet. Does she agree that doing that is often more cost effective for families as well? Just last week, I met with Fife Communities Climate Action Network in my constituency to talk about some of its great work to encourage and support insulation of people’s homes, for example. Does she agree that that is positive and that investing in clean energy—
Madam Deputy Speaker (Ms Nusrat Ghani)
Has the hon. Lady finished her intervention?
Madam Deputy Speaker
A point of order in the middle of an intervention, Dr Evans? I assume this point must be very pertinent and very urgent, but I will let the hon. Lady finish her intervention first.
Melanie Ward
Does the hon. Member for Brighton Pavilion (Siân Berry) agree that investing in clean, green, home-grown energy is the way to ensure that we have energy security for our country in the future?
Dr Evans
On a point of order, Madam Deputy Speaker. I am grateful for the chance to make a point of order about the intervention made by the hon. Member for Cowdenbeath and Kirkcaldy (Melanie Ward). She labelled the Conservative Benches “the manosphere”. Do you, Madam Deputy Speaker, think that it is suitable to use sex as a pejorative just because there happen to be only male Members sitting on the Conservatives Benches at this point in the debate? I would envisage it being a problem if I used such a term the opposite way to label only females sitting on the Labour Benches.
Madam Deputy Speaker
Dr Luke Evans, you have most definitely got your point on the record. Unfortunately, the Chair is not responsible for the language used by Members—if only we were—but you have made your point and it is most definitely on the record. Siân Berry may wish to respond to that or to continue with her speech.
Siân Berry
I would very much like to continue with my speech, Madam Deputy Speaker.
I agree with the hon. Member for Cowdenbeath and Kirkcaldy (Melanie Ward). We will never truly protect the families who are struggling with daily living costs, driven by fossil fuel dependence, if we do not get our economy and our transport system completely off the addiction to oil and gas that they suffer from.
I remind the House that every £1 invested in achieving climate targets is estimated by the Climate Change Committee to generate between £2 and £4 in wider economic benefits. These include major public health improvements and NHS savings that could reach another £130 billion by 2050. These are all excellent investments that have been resisted for years and years by people who should know better.
Finally, I would like to quote the Social Market Foundation. It has said that Government policy to keep freezing fuel duty has “inadvertently” hurt drivers,
“with policies that end up encouraging car use arguing that the bigger issue is a lack of investment in alternatives to driving, keeping people reliant on costly cars.”
The Conservatives should consider that if they wanted to carry out the measures that they ask for without corresponding consequences for public services, health and wellbeing, they might have considered that air travellers pay no fuel duty at all in this country. Air travel demand is driven by the most wealthy passengers, with the broadest shoulders, including those in the private jets owned by Conservative party donors and other owners of private jets. The Conservative motion could have gone further, and been more practical and less short term in its thinking altogether. Green MPs will not be supporting the Conservative motion and I am grateful for the time that the House has given me to explain why.
Dr Luke Evans (Hinckley and Bosworth) (Con)
I come here today with a mission. Unfortunately, for the past two years I have not followed closely enough the Labour party’s position on what the Government want to deliver. I have lost track of whether we are talking about pillars, aims, priorities, staging points, milestones or foundations, but at the start of the year the latest reinvention was a mission focused on the cost of living.
That was a slight change from when the Government first took office, because their main aim and their No. 1 priority at that point was to go for growth. Alas, as we have seen, that is not happening—the last figures say growth is 0%. What is more, it was evident that all the Government policies that were being put in place were actually anti-growth, as we are starting to see.
Tom Hayes (Bournemouth East) (Lab)
In a pithy sentence, will the hon. Gentleman describe the mission of the Conservative party?
Dr Evans
To win the next election, because then we can deliver the change that we are talking about.
On reducing the cost of living—the Government’s No. 1 aim for January—it seems bizarre that the measures that are being put in place have done nothing to support that. The Prime Minister went on the news on Monday with a five-point plan to deal with what is going on. He said energy bills would be capped, but we already knew that because it was announced in the Budget and the cap is in place until July. He said the fuel duty cap would be extended until September, but we knew that because it was in the Budget and then it is set to rise.
Melanie Ward
Will the hon. Gentleman tell us what the Conservative policy was in relation to fuel duty at the last election? By my recollection, it was that fuel duty would have been higher under the Conservatives than it is now under this Labour Government.
Dr Evans
The best way to decide how someone is going to behave in the future is to look at their past habits: we froze fuel duty for 15 years, and when a crisis hit in 2022 we reduced it. That is exactly the point that I was trying to make when the hon. Lady intervened. The Government have come up with a plan that is a talking shop and not doing anything. In response to the situation in Iran, they have simply reannounced what was in the Budget and further conversations with the CMA and the heating oil firms to work out whether they should or should not do something. That is precisely the point I am making: the rhetoric from the Government was “We are going to go for growth” but they then put in place some anti-growth policies, whereas now the cost of living is the No. 1 priority, but they are simply talking about that and making things worse.
Catherine Fookes
The Government are not just talking about it—we have put £53 million into supporting the cost of heating oil. That is doing something about it. When the Conservatives were in government, they took 200 days to do that.
Dr Evans
I am grateful to the hon. Lady for pointing that out because I was the energy PPS in the Home Office at that time, so I saw exactly how that worked, what it looked like and how difficult it is to put measures in place. Let me remind her that the Conservatives made a £200 unconditional payment to anyone who could claim that they were living off grid. That is a stark difference from this Government, who have put aside £53 million for the 1.5 million people across the entire nation who use heating oil because they live off grid—£35 per person. The Government have ringfenced that money, so it will only be available to the houses that are hardest hit, meaning that most households will not get any payment at all. That is the exactly the point I am trying to make: the Government talk a good game, but when it comes to delivery, they are not doing what they say.
Mr Luke Charters (York Outer) (Lab)
The hon. Gentleman is making some impassioned points about heating oil. I have a simple question for him: does he believe that the war in Iran increases the cost of heating oil or not, and will he reject the escalation that the Leader of the Opposition has called for in entering that war in the first place?
Dr Evans
Of course the war increases the risk. The Americans chose to go into that war and that is now having an impact on all of us. The question under debate is what are we doing about that and what measures are being taken. We are discussing fuel duty, which, as it stands, the hon. Gentleman’s Government will increase in September.
I have asked the Government to talk about the framework and the trigger points. I was glad to hear from the Minister that that increase is under consideration, but we need to know when that consideration will be made and what the trigger points are, because, as I rightly highlighted, we have seen all this before in 2022. We know what it looks like and we know how difficult it is to get to the canal boats, the park homes and the people living off grid.
The fifth point that the Prime Minister made earlier this week was about de-escalation, but he has no control over that if he says that he is not involved in the war. I am all in favour of de-escalation, but that is not a domestic policy that will bring down the cost of living—nothing tangible can come from that stance.
Why does this all matter so much? I live in and represent a rural constituency that is about 85% agricultural. We sit in the very heart of England, at the centre of the logistics industry. That means that every single day men and women from across Barwell, Earl Shilton and Donisthorpe get up, drive their vans, go out and drive their lorries, and support the economy.
Adam Dance
My constituent Sam works in a local haulage company. He tells me that the average profit margin for a company like his is 2%, while the cost of running a typical lorry has increased by 22%. Does the hon. Gentleman agree that the Government must support rather than damage this industry that we rely on to deliver essential goods, starting by cancelling the plan to increase fuel duty?
Dr Evans
The hon. Member is absolutely right. The Road Haulage Association has estimated that the fuel duty change will involve about an extra £2,000. On top of that, the change will hit the individual householder or car owner by about £140. The Government talk about making a difference, for example with the warm home discount or freezing energy prices, but those measures will already have evaporated given the very nature of the fuel duty escalation, on top of the prices that are rising because of Iran. People who work in the logistics industry are very susceptible to these fluctuations. It is right that we all want to move to electricity, but that is not going to happen immediately. I do not disagree with many of the arguments about the direction that we need to take, but the question is: what can we do now in the light of the reaction from Iran?
My constituents do not have the choice of walking or getting a bus, because we are a rural constituency and they rely on their cars. This increase will hit their cost of living by the very nature of the way it comes in. Let us contrast that with the 14 or 15 years of Conservative Government. That is usually the stock answer we hear from Labour Members. Gosh, 14 years! Yes, for 14 years we froze fuel duty because we recognised the impact it had on our households, on the white van man who is out working, on the delivery driver and on the lady who is driving from Hinckley to take a package up to Appleby Magna. Those people really need that support, and the change that we made and delivered had an impact.
Sir Ashley Fox (Bridgwater) (Con)
Does my hon. Friend agree that small businesses, not only in Bridgwater but across the country, were hit last year by the Chancellor’s jobs tax and have been hit this year by the additional burden of the unemployment Act and higher business rates, and that the prospect of higher fuel duty in September is disastrous not just for families who use their car for personal transport but for every small business?
Dr Evans
In true style, a knight of the realm recognises my very next point, because all these policies need to be set in context. Context is important, because each Government might need to raise taxes at some point, but here we have a toxic concoction of employment rights, more red tape, business rates going up and the support around business rates being taken away, fuel duty going up, national insurance contributions going up and the minimum wage going up. Any of those in isolation might be a good idea and might need to be done for support, but taken together they run against the Government’s milestones, mantras, missions—whatever they want to call them—on growth and the cost of living.
The pay-per-mile proposals for electric vehicles have been touched on, but I would like to expand on the issue. The proposals have brought huge consternation to many of my constituents. When I raised this issue straight after the Budget, I was blown away by the number of people from across the country who contacted me after seeing my question about how the proposals would work. There are simple, fundamental questions that the Government have not set about addressing. For example, what happens in the second-hand market? Who is judging when the mileage is being done? Are we likely to have monitors in our cars? That is meant to be done at an MOT, so what happens if I sell my car six months into it? What happens if someone lives in Northern Ireland and commutes to the Republic of Ireland? Where does the tax go then? What happens if we drive to Europe? For example, many people from my constituency like to take their caravan down to France for a holiday. Where do they pay their tax? How does that work?
The proposals are having the effect of stalling growth in the electric car market. Many people are saying, “I made the choice. I wanted to do the right thing for the environment and for my family, because that was a good decision to make”, but they are now regretting that decision, and the market is stalling as a result. I ask the Government how will that impact be felt in the context of fuel duty, and where will those measures fit into the framework of a continuing Iranian war?
To close where I started, I agree that in this place we can have a difference of opinion on when it is the right time to do something. I am pleased that the Minister said that everything was under consideration. That is really important for those listening outside. After all the Punch and Judy of this place on whose policy was right, whose was wrong and what has happened before, at the end of the day it is the families in Hinckley and Bosworth who will be looking at their budgets and at the uncertainty they see on the TV, and trying to decide what they should do.
I simply ask the Minister to outline what he would consider to be a trigger point for change. Would it be a certain price value for heating oil? Would it be a certain price value for petrol? Would it be a certain duration of the conflict? None of us knows when the conflict will end. All these questions could be addressed in a framework that we learned from during our time in government. In 2022, we had to come up with support schemes from scratch.
Mr Charters
The hon. Gentleman is right to draw attention to that 5p fuel duty cut at the height of the 2022 Russian invasion of Ukraine, but it was too slow. Will he remind the House of the level that diesel had got to at the pump when the 5p cut came in? Was it two quid? It was far too late, wasn’t it?
Dr Evans
Forgive me; I would be happy to give way again if the hon. Gentleman knows what the value was at that point. I do not know what it was because at the time I was working in the Energy Department trying to help support those households who were struggling and suffering, particularly those who lived in caravan parks, static homes and canal boats, who are off-grid and suffered by the very nature of where they got their fuel. He is right to say that we have to take this in the round. I have heard the Chancellor say that multiple times. How long will this go on? The decision is under consideration. I am not asking about when the decision is made or how to make that decision. This is more about understanding at what point we make those decisions and when the Chancellor decides that it is the right time to step in. It may well be that that decision was too late and that lessons could be learned. How do we know? That is the question I am posing to civil servants and this Government, because the hon. Gentleman’s party is now in charge of setting that out and deciding when is too long and when is too late.
I would argue that the current payment of £53 million is not enough for my constituents. Many of them will not benefit, because they will not be covered by the resilience fund. What the Government have done under the resilience fund—formerly the household support fund—is simply delegate the decision making to councils. Under the previous Government, when we were in charge, we chose not to do that because we wanted to support everyone who was struggling. It is this Government’s job to set out why they are not going to do that.
I would argue that keeping the fuel duty rise in September will create a terribly difficult time for any of us who drive cars or run a business that uses vehicles. Let us not forget that the energy price cap will change in July. The Government have rightly said that it is frozen until then, but the impact on prices will not come through the system until July, so we might well see prices and the price cap rise very quickly in July just as the fuel duty is about to come in in September. We are back to the point made by the knight of the realm, my hon. Friend the Member for Bridgwater (Sir Ashley Fox) about this toxic concoction of everything happening at once. I urge the Government to be aware of that and to set out the trigger points and the framework.
Dave Doogan (Angus and Perthshire Glens) (SNP)
I raised this entirely inevitable circumstance with the Chancellor at the spring statement, and she did something that she is given to do, which was to glaze over briefly and then talk about the strength and broad shoulders of the Treasury because of the difficult decisions that she had taken, as though they affected her and not the working people up and down these islands who have had their bank accounts raided by an insatiable appetite for more and more tax from this Government.
Dave Doogan
How could I not give way to the Scottish Labour MP who has managed to come in here for the tail end of the debate?
Melanie Ward
That was a little bit unnecessary. The hon. Gentleman is talking about raising taxes, and I just wonder whether he would acknowledge that the SNP Scottish Government actually have higher taxes in place than the Government in England.
Dave Doogan
I am very happy to explain that to the hon. Lady when I get to that element of my speech, which I will in due course.
The other thing that really irritates me about this Government is the way that they talk about the just transition. They say, “We will be using fossil fuels for another 50 years, and we will be producing them in the United Kingdom”, as though they hold all the levers. Let me explain something to Members on the Government Front Bench: if they continue to apply Labour’s atrophying interventions in the North sea oil and gas sector, the industry, which is global—I do not know whether that is news to Ministers—will go somewhere where it can make a living and a profit and does not have some sort of nefarious Government taxing it out of existence.
The specific 5p fuel duty referred to in the motion, is regressive—that much is pretty clear—and iniquitous. It is particularly iniquitous to people who live in parts of these islands that are more remote, such as my constituency. I see that the hon. Member for Gordon and Buchan (Harriet Cross) is back in the Chamber. She detailed that her constituency is 2,076 sq km. This is not a competition, but Angus and Perthshire Glens is 5,525 sq km and 166% larger than her constituency, actually.
Harriet Cross
I thank my constituency neighbour—almost—for giving way. Although my constituency might not be the biggest, it is definitely the prettiest.
Dave Doogan
This is where I practise respectful disagreement.
For rural areas such as my constituency, the constituency of the hon. Member for Gordon and Buchan, and many other places across all four nations, this issue is really challenging. There is not limited access to public transport in many places such as ours; there is no access to public transport in any meaningful sense. Remote areas get a lot more winter, and the people there tend to work in more agricultural professions. They tend to drive larger, heavier vehicles that are more fuel-hungry, so they will end up paying more. Deliveries have to come from further away, and that all gets added to the cost. Of course, all that adds to the cost to councils of delivering public services. The public services delivered in constituencies such as mine are very much more expensive to deliver than those in Holborn and St Pancras.
It is on that point that we need to see how much harder this issue will impact on people in rural areas. I have looked at the “Fuel Finder” app. At the BP petrol station at the bottom of Montrose before crossing the river, the price of a litre of petrol is 149.9p. If I go to the BP petrol station over at Vauxhall Bridge Road, the price of a litre of petrol is 5p cheaper. People in Scotland are already paying a premium that people in London and the south-east do not pay on their fuel, and the 5p that the Labour party wants to apply will come on top of that.
The UK rate of oil consumption for heating is 4.9%. In Angus and Perthshire Glens, the rate is 13%. Some 6,101 households heat their homes with oil. Oil has gone up sometimes by 150%, so a £300 to £400 delivery is getting on for £1,000. There are also punitive requirements for the volume that people get delivered. A further 2,000 people in my constituency are on tankered gas. That must not be forgotten in this cost spike crisis, which, as I said, I predicted at the Chancellor’s spring statement.
Dave Doogan
Before the hon. Lady gets back to her feet, she asked me about tax and she should be aware—although apparently she is not—that most income tax payers in Scotland pay less tax. Over and above that, her constituents do not have to pay for their tuition fees when they go to university. All her constituents, like my constituents, pay 30% less for their council tax than people in England. The Scottish living wage that her constituents benefit from is 74p per hour higher than the UK’s minimum wage. Of course, her constituents get the £40 Scottish child payment on top of all the other benefits that the SNP has delivered. On that note, I will take her intervention.
Melanie Ward
I could come back to the hon. Gentleman on all the ways in which my constituents are getting really poor value for money in Scotland, such as the cuts to police numbers in Fife and excessively long waiting lists in the NHS that are not falling, as they are under a Labour Government in England.
The hon. Gentleman talks about heating oil. He will be aware—in fact, I think he referenced it—of the additional £4.6 million for the Scottish Government that the Prime Minister announced on Monday to support people in rural areas and vulnerable households dealing with the increases in the price of heating oil caused by the war in the middle east. Can the hon. Gentleman tell us when the Scottish Government will make that funding available to his constituents and my constituents?
Dave Doogan
I do not have the detail of the Scottish Government’s plans, but I am pretty sure that nobody in England or anywhere else in the United Kingdom has received actual monetary support from that funding.
Let us be really clear. The Chancellor talks about the broad shoulders of the Treasury and says that thanks to her fiscal wit—if you can believe that—she has come up with £52.4 million. If we divide that money across the number of people who will need support, it comes out at about £35. That is £35 of support from a Labour Government for people seeing a £700-odd price shock in heating oil. Somebody somewhere in the Treasury needs to get themselves a calculator.
The fuel duty increase is inflationary: it will feed through to the prices of goods and services, all of which will subsequently have VAT added on to them. The 5p added to the price of fuel is actually 6p, because it is added before the VAT is added to the fuel, so it is not 5p at all.
I am pretty certain that we can read in the Government’s amendment to the motion the vacuous nature of their application to this subject. Like other right hon. and hon. Members, I am pretty confident that a wee bit closer to the time of the elections in Scotland and Wales in May, the Government will suddenly find the wit to scrap this hike in fuel duty. I am quite happy for them to do that, but as other people have pointed out, households are in crisis now. Now is the time for the Government to lead, but that will never happen with a Labour Government.
Robbie Moore (Keighley and Ilkley) (Con)
It is good to speak in this debate on a subject that is impacting on all our hard-working businesses, families, hauliers and those involved in the logistics industry—the rise in fuel duty.
It is clear that Labour is planning to put up fuel duty for the first time in 15 years. Despite the conflict in the middle east, which is pushing up inflation and the cost of petrol at the pump, we have a Chancellor who said in her spring statement that this Labour Government have “the right economic plan” and boasted that households would be better off. She is doubling down on her plan to hike fuel duty, fund more welfare handouts and scrap the two-child benefit cap. That is not benefiting the grafters who are driving local economic growth across our constituencies. That is why increasing fuel duty for the first time in 15 years is such a negative approach, and it is impacting on all those across our constituencies.
Robbie Moore
Last autumn, my constituent Lesley O’Brien got in touch with me with serious concerns about the ramifications of any potential fuel duty hikes on the road haulage sector. As well as being a trustee of the Road Haulage Association and the founder of the transport forum Freight People, Lesley is the joint managing director of Freightlink Europe, a haulage company based in my constituency in West Yorkshire. It is a traditional, family-run business, based on the core values of honesty, respect and a dedication to provide the best level of service to customers.
However, businesses such as Freightlink Europe, and the hard-working people who run them and are employed by them, face unprecedented difficulties. Many haulage companies and those involved in logistics have contacted me directly with their deep concerns. Through no fault of their own, the average profit margin for many of those businesses has been significantly reduced to only 2%, if not lower, and the cost of running a typical haulage business has increased by more than 22% in recent years.
Melanie Ward
I wanted to respond to the point that the hon. Gentleman made a moment ago. He said something to the effect that the people who would benefit from our Government lifting the two-child benefit cap were not grafters. Does he not agree that the people who will benefit from the two-child benefit cap being lifted are children who were living in poverty, and that the majority of the households that those children live in are, in fact, in work? They are grafters.
Robbie Moore
My firm view is that the Government should be supporting all of those individuals to drive economic growth across the country. By removing the two-child cap, the Government are saying to those families who have worked out what their household spending power will be over a long period of time, “If you want to have more than two children, the Government will step in and pay for you.” That negatively impacts hard-working families that have made those hard fiscal decisions throughout. The reality is that increasing the level of welfare spending by taxing businesses such as those across my constituency—those involved in the haulage industry and the logistics sector that will now see a hike in the price of fuel—negatively impacts those who are driving economic growth, and therefore impacts everybody.
Tom Hayes
I think the point that my hon. Friend the Member for Cowdenbeath and Kirkcaldy (Melanie Ward) was making is that, contrary to what the hon. Member said, the majority of parents of children who are disadvantaged by the two-child benefit cap are working. They are grafters; they are the hon. Member’s constituents, who are often working multiple jobs just to make ends meet in the difficult cost of living crisis that we inherited. Surely he is not calling the parents who will benefit from the lifting of the two-child benefit cap, including his constituents, workshy.
Robbie Moore
It is interesting that the hon. Gentleman has not turned up to this debate—a debate on an incredibly important issue that is impacting all of our constituents, including his—in good enough time to make a speech on the fuel duty increase, but wants to turn the debate back to a point that I answered in my response to the hon. Member for Cowdenbeath and Kirkcaldy (Melanie Ward). That point still stands. If the Government increase taxes on the hard-working businesses and individuals across the country who want to drive economic growth in order to benefit only a very few people, they are not providing opportunity for many young people and hard-working families across all our communities.
Dr Luke Evans
Back when we were in government, one of the ways we tried to solve this problem was by changing the universal credit cut-off limit from 63% to 55%, which meant that the more work people did, the more money they kept. That is exactly the way to support people back into work: making sure that they keep more of their own money. That incentivises work, rather than disincentivising it. Does my hon. Friend agree that there is an ideological difference here? We support work; the other option is just a handout.
Robbie Moore
I absolutely agree with my hon. Friend. By taxing families and individuals less, we provide them with more money in their pockets and we drive economic growth, as they have more of their own domestic spending power.
This Labour Government want to hit many businesses and individuals with three consecutive fuel duty hikes in a matter of months. If these proposals go ahead, motorists and haulage companies face being hit with the biggest tax burden in years. The road haulage industry is critical to our nation’s economic success: goods are moved around daily, and logistics are key to keeping our country moving. Everything we eat, drink, wear and consume depends on road haulage services—on companies such as Freightlink Europe. Road freight moves 81% of all goods, and 98% of all agricultural and food products are moved around the country by road haulage.
The Road Haulage Association estimates that a 5p rise in fuel duty will result in a typical motor vehicle-owning household spending an extra £100 each year and increase annual household spending by £1.9 billion, which is a whopping £7.3 billion over the rest of this Parliament. In my eyes, that is a significant additional tax burden for this Government to put on those households. At a time when the conflict in the middle east is pushing up inflation and the cost of petrol at the pump, it is beyond belief that Labour wants to push ahead with this fuel duty hike.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
My hon. Friend is making an excellent speech. I want to highlight the choices that people living in rural constituencies such as mine are making. In Coldstream, the price of diesel per litre has gone up from £1.41 to £1.69 over the past few days. That is a huge increase, but because of the prospective tax rise that is coming down the line from the Labour Government, constituents tell me that they are looking at jobs and considering their alternatives, because they have to drive to get to work. A constituent who has been offered a new job that is further away, and who will have to drive further to get to it, is thinking about turning it down because once the 5p fuel duty increase comes in, he will not be able to get to his job.
Robbie Moore
My hon. Friend makes an excellent point. I will come on to the additional challenges in rural areas, but he makes a clear and concise point: if people have to travel further for a job opportunity, they are going to be taxed more by this Labour Government. That is on top of the Labour Government removing the rural services delivery grant that was providing additional support to many local authorities operating in rural communities. We clearly have a Government who are not interested in supporting our rural communities. Of course, this fuel duty hike comes on top of the increase in employer national insurance contributions and business rates. It will impact our care workers, our district nurses and our hospice sector, all of which are also impacted by the rise in employer national insurance contributions.
At a local level across the Bradford district, we face an additional tax burden: the clean air zone, which was rolled out several years ago. A taxi driver with a non-compliant vehicle who wants to travel into Bradford—an area that we all want to see grow and thrive economically—faces a daily charge of £7 to do so. A white van driver is charged £9 daily to go into Bradford, and someone operating a bus or a heavy goods vehicle is charged £50 a day to do so, as a result of the choices that Labour-run Bradford council has made.
Labour-run Bradford council has received £20 million from collecting this additional tax from our hard-working businesses over the period that the clean air zone has been in force across Bradford. It is something that I am firmly opposed to. Bradford council will say that it is going to spend this money wisely across the district, but based on a freedom of information request that I submitted to Bradford council, I can contradict that narrative. As of 2023, just £4.1 million of all highways spending was spent within the Keighley and Ilkley constituency over a six-year period. To put that in context, the spending in Bradford East, Bradford West and Bradford South was £19.2 million, £17.4 million and £13.1 million respectively. That illustrates that there is no fairness in how Bradford council spends the money it is collecting from my hard-working constituents across Keighley and Ilkley.
Robbie Moore
The right to roll out a clean air zone was given to local authorities, enabling them to make that decision, but some local authorities have refused to do so. The Mayor of Greater Manchester, Andy Burnham, decided not to roll out a clean air zone—that is an example of a Labour administration at a local level making the right decision on this issue. Labour-run Bradford council, however, decided to impose an additional tax on hard-working motorists across the Bradford district. As a result, places in my constituency such as East Morton face increased traffic congestion, road usage and speeding in the areas outside the clean air zone, where motorists try to take different roads to avoid any additional charge.
Rural communities will also be hard hit, as has been rightly pointed out by my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont). Many of those businesses are in our farming community, which has already been hit by additional cash-flow implications. One point that has not been raised in this debate so far is the increase in red diesel prices, which have spiked by 60% in the last month alone, as supplies remain tight. From the research I have done, red diesel has increased up to an average of 109p a litre in March, up from 67p a litre in February. Farming businesses are reporting being quoted a variety of prices in the past month, ranging from 100p a litre to 135p a litre. That is a significant increase from the 67p a litre we saw just last month.
Several farmers are rightly querying why red diesel prices appear to have increased much more rapidly than road diesel and petrol prices. What meetings is the Minister having with Department for Environment, Food and Rural Affairs Ministers specifically on red diesel, which is having an impact right now on the cash flow of many of our hard-working farmers? That is in addition to delinked payments dramatically dropping, the chop and change over the sustainable farming incentive, and the uncertainty that this Government are creating for many of those working within our farming community, and that is on top of fertiliser prices going up.
The Prime Minister said earlier this week that he will always support working people, but what does that say to those hard-working people across the country and across Keighley and Ilkley, such as Lesley O’Brien, who I mentioned earlier? Businesses and employers face bigger and bigger hurdles the longer this Labour Government are in power. Three consecutive rises in fuel duty is an insult to hard-working people across this country. The Prime Minister and this Government need to get a grip, back our hard-working businesses and show some empathy to those concerns consistently being raised by Opposition Members. It is disappointing, although perhaps not surprising, that we have not heard one Labour Back Bencher contribution in an incredibly important debate on fuel duty.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
Without getting into a fight about who has the biggest constituency, Moray West, Nairn and Strathspey is in the top five for geographic size, and my constituents grapple on a daily basis with energy costs across the whole suite of energy measures, whether that is road fuel, heating oil, tank gas, or the electricity prices that they pay. The issue for them is that the combination of all those things is totally disproportionate. The highest prices for road fuel are paid in rural areas such as those in my constituency. The highest price for heating oil is paid there, because there are high distribution costs. The highest price for electricity, because of high standing charges, is paid in my constituency and in constituencies in north Wales and Merseyside, which is the other high standing charge area.
The combination of all that means that my constituents are paying substantially more for their energy than constituents elsewhere in the country. Successive Conservative and Labour Governments have presided over discriminatory—I do not use that word lightly—energy charging for electricity. To have that compounded by the highest fuel charges and the highest oil charges is extremely painful for those households who, like everyone else, are suffering from the cost of living crisis. They also have the coldest temperatures in the UK, and these constituencies are producing the highest amount of energy per capita. The people who are using that energy hundreds of miles away are paying less to use it. The situation is utterly disgraceful and needs to change.
This Government have had nearly two years to make changes to standing charges and electricity prices, but they have not done it. They have not made a decision on it, and decisions are taking far too long to be made. Pace is everything in this. People are suffering every single day, but it is not just the individuals who suffer. Many Members have referred in this debate to the cost to businesses in these areas, generally from high transport costs. For businesses to get around and deliver their goods, to get their goods to market and to get their supply chain to deliver to them frequently involves travelling large mileages. Public services, including our emergency services, are paying vast amounts for fuel.
On Monday, while I was experiencing a very enjoyable walk to work on a bright spring day here in London, my constituents in Aviemore were contending with a temperature that felt like minus 5°, and the Highland council and the trunk road authority had gritters out for a considerable part of the day to keep the roads safe. Those gritters travel hundreds of miles on their routes because that is what they are required to do, which means that local authorities, the NHS boards and other public or emergency services are paying out vast and unpredictable amounts for fuel when budgets have already been set. Capital projects involve built-in risk to cover future price increases that are quite considerable, so they are protected to an extent, but that does not apply when it comes to public authorities’ day-to-day operational costs. The fuel price increases include increases in heating oil prices. Many primary and secondary schools in the Highlands, and Moray and Aberdeenshire and in other parts of Scotland—and, indeed, other rural areas in the rest of the UK—pay for their heating oil, and these increases will have a very detrimental impact on them.
The hon. Member for Gordon and Buchan (Harriet Cross) made many reasonable points about the impact of the energy profits levy and the fiscal regime that governs North sea production, and about the need for us to continue to produce oil and gas for as long as is required, while still making a transition. Let me gently point out to Conservative Members that while I agree with them that the EPL needs to be changed immediately—in fact, it is beyond time for it to be changed—they have drawn away from that transition to renewables because of the pulling away from climate change targets. I know that North sea companies agree with them about the EPL, but they were utterly dismayed about that pulling away from the transition, because the oil and gas majors are the same people who are investing in renewables. We need to get that transition right to avoid the job losses that the hon. Member mentioned.
A number of Members mentioned bus fare caps. Let me, again, gently point out that in my constituency in the north of Scotland, and across the highlands and islands, a pilot is being run for a £2 cap enabling people to travel, in some cases, for hundreds of miles for £2. That is progressive, because people in, for example, Inverness in the highlands who need access to services have to travel hundreds of miles to get it. The cap is about treating people with fairness, recognising that they are at the heart of our energy production and are still paying more for their energy, and giving them some services back for that. Peak rail fares have also been withdrawn.
Unfortunately, the hon. Member for Cowdenbeath and Kirkcaldy (Melanie Ward), who mentioned heating oil support in Scotland, has left the Chamber, but I can tell the House that the Scottish Government have more than doubled the heating oil funding provided by the UK Government—although is still nowhere near enough, because the UK Government should be taking far more responsibility and putting in far more money. People will be able to apply for that support from 1 April, and it will be delivered through Advice Direct Scotland. there is a plan in place, and it is moving forward.
Red diesel used to be available to local authorities for gritting roads. Reinstating it would make a huge difference to the local authorities in the north of Scotland who have to spread grit for considerably longer than those in many other parts of the UK, and I urge the Minister to consider doing so, because it is essentially an emergency service. Our roads would not be safe in the depths of winter without being gritted, and making red diesel available to those vehicles again would not be a bad idea at all.
Finally, let me simply urge the Government to take account of what happens in rural areas—how people commute, how they get to work, and how services are delivered—and to consider that in the context of fuel duty. They have the power to fix fuel duty. Such certainty is important, especially to people who are planning and budgeting for a year ahead, and that applies to public services in particular.
John Lamont
To pick up the hon. Member’s point about fairness, he will be aware that the Institute for Fiscal Studies has highlighted that Scottish taxpayers are £710 on average worse off compared with taxpayers in England as a result of the Scottish Government’s higher rates of income tax. Does he think that is fair?
Graham Leadbitter
I have always believed that the tax we pay is part of a contract with the state, and that we should consider whether it is reasonable to pay that price for the services we get back. I would also observe that we have to look at tax in the round. Broadly speaking, council tax in Scotland is considerably lower than in the rest of the UK. The tax on the accommodation I use in London is certainly considerably dearer than that on my own property at home, which is larger, and that is pretty much the case throughout Scotland. The cost of living is generally cheaper in Scotland than it is in central London.
Graham Leadbitter
And the taxation being paid gives people back more services and better services. Things such as the removal of peak rail fares and the freeze on bus fares—the cap on bus fares has been put in place and is being tested in the north of Scotland—all really benefit people. Beyond that, however, more than half of taxpayers in Scotland do not pay more income tax than people do south of the border. That is a fact.
I urge the UK Government to consider many of these proposals. They could consider measures on bus fares and peak rail fares, but they also have the power over key taxation levers, including fuel duty. They need to make decisions quickly to give people more certainty and a little bit less risk about where things are going. Some things are not controllable, and I wish the Government did not have to consider them, because they are difficult, but the Government have levers that can make it a bit easier for people, and they should use those levers.
Greg Smith (Mid Buckinghamshire) (Con)
How absurd it is that, on an issue that affects each and every one of our constituents, whether they drive their own car or take the bus or a diesel-powered train, not one Government Back Bencher—not one—sought to catch your eye, Madam Deputy Speaker, to make a speech either to defend the Government’s plan to increase fuel duty this September, or perhaps even to have the backbone to stand up and oppose it.
Meanwhile, from the Conservative Benches, we heard the case set out clearly and with passion by the shadow Secretary of State, my right hon. Friend the Member for Basildon and Billericay (Mr Holden), in opening the debate. My hon. Friend the Member for Gordon and Buchan (Harriet Cross) rightly spoke about the volume of internal combustion engine vehicles in the United Kingdom, exploring how far this tax rise will go and how Labour simply does not understand rural life, as well as the folly and unfairness of “pay per mile” for rural communities.
My hon. Friend the Member for North Dorset (Simon Hoare) rightly identified the absurdity of the Government preferring to import oil rather than use our own resources in the North sea. On the fuel finder, he made an accurate point, which I recognise from my own constituency, about the scarcity of filling stations in rural communities. I accept that we had a bit of a trade-off with constituency sizes this afternoon, but I can think of only eight filling stations in my modest 336 square miles in Mid Buckinghamshire. It is a point well made that, in rural communities, people often have to travel great distances to fill up with fuel, and may end up burning more fuel by going to the apparently cheaper station further away.
My hon. Friend the Member for Beaconsfield (Joy Morrissey) spoke good Buckinghamshire common sense when making points about rural communities. Likewise, that case was made by my hon. Friends the Members for North West Norfolk (James Wild), for Hinckley and Bosworth (Dr Evans) and for Keighley and Ilkley (Robbie Moore). My hon. Friend the Member for Bromley and Biggin Hill (Peter Fortune) made good points about the simply ridiculous and hideous levels of taxation on motoring in our capital city under Labour Mayor Sadiq Khan.
Let us ask a very simple question. When the Chancellor talks about asking those with the broadest shoulders to pay more, does she mean the care worker filling up their car to get around to their house visits, particularly in rural communities? Does she mean the self-employed delivery driver keeping our high streets alive? Does she mean the small business owner trying to make ends meet? I very much hope that she does not, but what we see on the ground, as the reality, is that those are exactly the people who will be hit hardest by this policy of increasing fuel duty.
John Slinger (Rugby) (Lab)
Given the hon. Gentleman’s concern for the various categories of workers and businesspeople he has just set out, can he explain why his party, when in government, planned to oversee an increase in fuel duty and did not budget for the kind of freeze that he is now demanding, were it to have won?
Greg Smith
The hon. Gentleman is late to the debate—we have been around that a few times over the course of the afternoon. The record of the Conservatives in government was to freeze council tax and freeze fuel duty—indeed, we cut it when we saw Russia invade Ukraine in 2022. Conservatives stand on a proud record of keeping fuel duty down, freezing it and cutting it. It is his party that, in government, is going to increase it on hard-working people this very year.
Let us be absolutely clear: this is a tax rise, a regressive tax hitting the poorest the hardest; a deliberate, calculated and, frankly, cynical tax rise phased in carefully in the hope that people will not notice. We have a rise in September—a back to school tax. We have another in December—a Christmas shopping tax. And then, in March, we have a spring clean of people’s wallets. Three moments in the year, three hits to working people.
Dr Luke Evans
It would be remiss of me not to point out that in July the price cap will be reviewed. Does my hon. Friend agree that there is a decent chance, given what is happening in Iran, that we may well see an increase in energy bills anyway?
Greg Smith
My hon. Friend, as usual, makes a clinically accurate point, and he is absolutely right to do so.
The truth is that the headline figure does not even tell us the full story. This is not just a tax rise; it is a tax on a tax. Fuel duty is applied first and then VAT is charged on top of it. So when the Government increase fuel duty, they are also increasing the VAT paid on that tax—a tax on a tax. That means that what they present as a 5p rise is not really 5p in practice, but closer to 6p at the pump—a hidden double tax built into the system, taking more from every driver, every business and every household.
We saw that argument tested just this weekend. The Energy Secretary was asked directly about the soaring cost of fuel and his instinct was simply to point to global events, external pressures and anything other than the decisions being made here at home in Whitehall. But he was confronted by a simple, undeniable fact: a breakdown of the price of a litre of petrol showed that fuel duty alone accounts for around 38% of the cost and, once VAT is added on top, that more than half of what drivers pay at the pump is tax—more than half.
Let us be clear: this is not simply about international markets or events beyond our control. Of course global factors play a role and of course wholesale prices fluctuate, but when over half the price at the pump is made up of taxes set by this Government, Ministers cannot hide purely behind external circumstances. They cannot blame global markets and ignore their own policy choices. And they certainly cannot claim to be easing the cost of living while actively increasing the tax burden built into every litre of fuel. The consequences ripple through the entire economy. Equally, when prices go up, including at the hands of the Chancellor, crime also rises. Already we are seeing reports from our hauliers across the country of fuel thefts taking place. That is serious.
Fuel is not a luxury; it is fundamental to how the country works. It is how goods get to our supermarkets, how tradespeople get to jobs and how carers reach the most vulnerable. When the cost of fuel rises, the cost of everything else rises—shops feel it, businesses feel it, families feel it—and it is, of course, inflationary. That matters not just for household budgets, but for the public finances. Around a quarter of the United Kingdom’s national debt—some £750 billion—is index-linked, so higher inflation means higher debt interest costs. In other words, this policy risks making the Government’s own fiscal position worse even as it makes life harder for working people.
The question is: what are the Government going to do, and why are they doing this? Why impose higher costs on drivers, businesses and families at a time like this? The answer lies in a failure at the heart of this Government’s approach: they have lost control of welfare spending. Instead of taking the difficult decisions required to ensure that welfare spending is sustainable and properly targeted, they have allowed costs to rise and rise. Now, having failed to grip that challenge, they are asking working people to pick up the bill. We have already seen tax increases on jobs, family businesses, our high streets and our farmers; this is simply the next step. Drivers are being asked to pay the price for the Government’s failure.
There is a different approach. In government, the Conservatives understood the pressure that fuel costs place on households and businesses, which is why we cut—I repeat, cut—fuel duty, froze it year after year, and stepped in again when global pressures caused prices to spike. We recognise that Governments do not balance the books by making it more expensive for people to go to work or to set up or operate a business and do not hide tax rises within the price at the pump. No one can create a system where people are taxed twice—once through fuel duty and then again through VAT applied on top—and call that fair. This policy fails the basic tests; it is an unfair tax. We Conservatives will oppose this unfair tax rise, and any Member who cares about what our constituents are paying at the pump will surely vote for our motion tonight.
The Exchequer Secretary to the Treasury (Dan Tomlinson)
I thank hon. Members for their contributions throughout the debate. I thank the hon. Member for Mid Buckinghamshire (Greg Smith) in particular for his winding-up, as well as the Tory Whips for giving me the opportunity to remind the House of his support for Liz Truss as PM. My Parliamentary Private Secretary, my hon. Friend the Member for Hastings and Rye (Helena Dollimore), has just passed me the 10 reasons the hon. Gentleman set out for supporting Liz Truss for PM—I do not know whether that is something he now regrets.
I will turn to the serious matter at hand. We are debating this issue at a time of significant international uncertainty. As the House is aware, we are now in our third week of the conflict in Iran and across the middle east. As the Prime Minister has made clear, our priority will always be the national interest through protecting British nationals and supporting our allies.
This Government recognise that the conflict is not just a matter of foreign policy, and that it also has direct consequences for individuals and families here in the UK. Movements in global energy markets are likely to put upward pressure on inflation, and the longer this conflict continues, the greater the risk it poses to both economic stability and the cost of living in the UK.
That is why the Government are clear that rapid de-escalation remains the best way to protect people from further fuel price increases. We are working with our international partners to support efforts to secure key energy routes and guarantee the security of vessels passing through the strait of Hormuz. We are also supporting a co-ordinated release of collective International Energy Agency oil reserves, the release of which has helped to stabilise international oil markets.
Dr Luke Evans
The Minister is right to talk about de-escalation and look to the international side, but, as I raised in my speech, there are domestic factors at play here too. What are the Government doing to set out a timeline to make these decisions and assess their implications so that the country can plan around what may or may not be going on? We do not know how long this will go on. What points are the Government looking at to make and inform their decisions?
Dan Tomlinson
I will come on to talk about fuel duty; I was just setting out the context at the opening of my speech.
The Government’s approach is to focus squarely on the British national interest and the economic interests of British households. The Opposition have clearly taken a different approach, choosing instead at times to egg on military action, focusing more on posturing and trying to get one up on the Government than on looking after our own at home and abroad.
Mr Jonathan Brash (Hartlepool) (Lab)
My hon. Friend hits the nail precisely on the head. We are debating a possible fuel duty increase seven months ahead of it happening. The reality is that the Opposition have been caught championing an illegal war in the middle east that the public of this country do not support, and they are trying to divert it with this nonsensical argument.
Dan Tomlinson
My hon. Friend is right: the Opposition are totally on the wrong side of common-sense public opinion in this country. On the most important of tests, they have failed. He is also right to point out that the fuel duty increase is pencilled in for September, as the Chancellor set out in last year’s Budget. I think it is worth reminding the House that fuel duty right now is lower than it was in 12 of the 14 years of the Conservative Government. In 2010, 2011, 2012 and all the way up to 2022, fuel duty was higher than it is now.
In the 2025 Budget, we extended the temporary 5p per litre cut in fuel duty until the end of August this year, and we cancelled the inflation-linked increase that had been planned for 2026-27. Taken together with decisions made since the 2024 Budget, the Government’s fuel duty freeze will save the average motorist more than £90 compared with the plans that we inherited. Conservative Members, who have made contributions in this debate, stood in the July 2024 general election on spending plans that would have had fuel duty increase by 5p—[Interruption.] Yes, it is true.
Unless the Conservatives are disowning the official forecasts that were published before the general election and the manifesto on which they stood—which, by the way, did not mention plans for fuel duty—I think we are again discovering that there were further black holes in the Conservatives’ spending plans. Their plans, which were set out in the official forecast in the run-up to the general election, said that fuel duty would increase by 5p last year—by RPI last year—and then by RPI again this year. We have instead chosen to freeze fuel duty both last year and this year and to maintain the 5p cut until September of this year.
The Liberal Democrat spokesperson, the hon. Member for Westmorland and Lonsdale (Tim Farron), and other Members made very important points about the impact of fuel price increases on those in rural communities. He will be aware, as I believe it applies to his constituency and to some of the others mentioned today, of the rural fuel duty relief scheme, which does provide a reduction to motorists in those parts of the country that are more rural. As I said in a Westminster Hall debate, which some in this Chamber attended, I am always happy to receive representations on whether that scheme should be widened.
The hon. Member for Gordon and Buchan (Harriet Cross) asked about the electric vehicle excise duty change that will be introduced in the coming years, and whether it will be extended. No, it will not. The plan is as set out at the Budget last year. Government Members think that it is fair that all vehicles that contribute to the wear and tear on our roads should also contribute towards the repair costs and to the public finances, and they will do so at a lower rate of 3p rather than 6p, which was the average amount paid by those who pay fuel duty.
Harriet Cross
Just for clarification, my point was that that is a pay-per-mile scheme and that the pay-per-mile basis would not be extended to petrol and diesel cars. Is the charge per mile on EVs a gateway for that extending to petrol and diesel vehicles?
Dan Tomlinson
The EVED charge is on electric cars because they do not pay fuel duty. Petrol cars do pay fuel duty, which, because it is on a litre of petrol, is a charge that is determined by how much someone drives.
The hon. Member for Brighton Pavilion (Siân Berry) made some good points about public transport. I congratulate her on getting through the speech after the very large number of interventions that she had to respond to—and she responded to them well. I point out that this Government are introducing the first rail fares freeze in 30 years and that we are investing £38 million to roll out 319 new zero emission buses across England—lots of good things.
As ever, decisions on taxation will be taken at the appropriate time, based on the best evidence and with careful regard to the public finances. The Government will continue to take the right decisions, protecting the public finances and supporting families with the cost of living.
The previous Government left us with the worst living standards stagnation in memory. A Reform Government would crash the economy just like Liz Truss did, with wild unfunded promises. The Greens would push up energy bills by blocking clean power. This Government reject the chaos offered by Opposition parties. We have an economic plan that is the right one for Britain. Our plan means that we are more prepared for this shock than otherwise, with borrowing falling by 1% of GDP last year, our power supply now less reliant on the gas rollercoaster, living standards rising, inflation falling, and the big and right decision to take £117 off annual energy bills in April yet to come. It is the right plan, and this Government will stick to it for the good of the British people and this great country that we all serve.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
Madam Deputy Speaker (Caroline Nokes)
I will now announce the results of today’s deferred Divisions.
On the draft Employment Rights Act 2025 (Investigatory Powers) (Consequential Amendments) Regulations 2026, the Ayes were 368 and the Noes were 107, so the Ayes have it.
On the draft Higher Education (Fee Limits and Fee Limit Condition) (England) (Amendment) Regulations 2026, the Ayes were 277 and the Noes were 98, so the Ayes have it.
[The Division lists are published at the end of today’s debates.]