Fuel Duty

Cathy Jamieson Excerpts

Monday 12th November 2012 Commons Chamber

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I beg to move,

That this House believes that, at a time when the cost of living is rising and our economic recovery is fragile, it cannot be right to increase fuel duty by the planned 3 pence in January 2013; calls upon the Chancellor of the Exchequer to cancel this rise in fuel duty at least until next April; and believes that this change could be funded by clamping down on known tax avoidance schemes.

Everyone in the House knows that families are feeling the squeeze, that low and middle-income families are hardest hit, that prices are rising higher than wages, that small businesses are struggling and that the economy is still fragile, all of which makes it exactly the wrong time to hike up fuel costs. At the outset, I urge hon. Members on both sides of the House to join us and back our call to delay the January fuel duty rise. I particularly appeal to hon. Members who have rightly voiced concerns in recent months to do so. Difficult decisions have to be made to get the deficit down—we understand that. Yes, there were times in the past when Labour put up fuel duty, and no one disputes that.

[Several hon. Members]

rose—

[Cathy Jamieson]

I shall give way to the hon. Member for South West Bedfordshire (Andrew Selous), who I am sure is going to tell me that he supports our motion.

[Andrew Selous (South West Bedfordshire) (Con)]

Will the hon. Lady tell the House how many times her Government put up fuel duty?

[Cathy Jamieson]

I can tell the hon. Gentleman that on about 13 occasions the Labour Government decided not to put up fuel duty, to delay an increase or to change it because of economic circumstances, which was absolutely the right thing to do. We looked at the economic circumstances, and made decisions to delay or cancel when that was the right thing to do, including at the height of the economic crisis.

[Mr Jim Cunningham (Coventry South) (Lab)]

I hope my hon. Friend noted that about a fortnight ago there was an Adjournment debate in the House with cross-party support for a freeze on the increase. Although Conservative Members may go on about the increase under Labour, we must remember that they are in government now and that they could have stopped this 18 months ago.

[Cathy Jamieson]

My hon. Friend makes a good point. It is regrettable that some hon. Members who only a few weeks ago called for the very thing that our motion calls for now seem to have cold feet. Given that the economic recovery is fragile, the Government should back the motion.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

What is the total taxation on a litre of petrol, how does it affect the general public, and should that be advertised in every forecourt in the land?

--- Later in debate ---

[Cathy Jamieson]

My hon. Friend makes an interesting point, because it is about 81p per litre at the moment. He is absolutely right: when people go to the forecourt to fill up their car, they want to know exactly how much it is going to cost. They do not go to the forecourt and think about what might have been; they think about what the price is in the here and now. Petrol is 15p a litre more than it was at the general election, and it is 5p a litre more than it was in the summer, when the Government last deferred a rise. Let us remember that the Chancellor made that decision after pressure from the Opposition.

[Several hon. Members]

rose—

[Cathy Jamieson]

I shall give way to the hon. Member for Dover (Charlie Elphicke), who I am sure is going to tell me how many of his constituents have contacted him asking him to back our motion.

[Charlie Elphicke (Dover) (Con)]

I am not sure that this will quite fuel the hon. Lady’s bandwagon, but why did the Labour Government, in their closing stages, include in their Budget six further rises for this Parliament?

[Cathy Jamieson]

It may have escaped the hon. Gentleman’s notice that his party is now in government, and it has to take responsibility for its actions, including the Chancellor’s VAT rise, which has added 3p to the price of a litre of petrol, costing motorists on average over £100 more.

[Several hon. Members]

rose—

[Cathy Jamieson]

May I make a bit more progress, as we want to hear what the Government are doing? Their own figures tell us that the price of petrol is now more than 136p a litre. In my constituency, prices at a rural petrol station at the weekend were 139.9p a litre for petrol, and 144.9p for diesel. Only this morning, I heard a price of 160p a litre in the Scottish highlands.

[Mr Alan Reid (Argyll and Bute) (LD)]

When Labour was in power, other island MPs and I consistently went to see Labour Ministers to ask for an island fuel duty discount. It was refused. Within a year, this Government introduced that policy. Will the hon. Lady tell us what the Labour party’s policy is on a rural fuel discount?

[Cathy Jamieson]

I hope that when he goes back to his area, the hon. Gentleman is able to explain to his constituents why he has not backed the motion tonight.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

The hon. Lady said at the outset that this is not the time to put up fuel duty. Will she tell us whether, each and every time Labour put up fuel duty over the past 13 years, it was the right thing to do, or do we have great joy in heaven with the repenting of the Labour hordes this evening?

[Cathy Jamieson]

Once again, I am rather disappointed with the hon. Gentleman’s approach. I should have thought that he, too, would want to be able to go back and tell his constituents that he had supported a motion to ensure that the rise did not go ahead. The tax on a tank of petrol at the general election was £37.60. It has now risen to £40.30, and if the 3p rise goes ahead on 1 January it will rise again to £42.20.

--- Later in debate ---

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Lady is testing the patience of the House. It is unfair. We are going to have to introduce a time limit already. If she wishes to speak, would she please put her name down? She cannot make a speech now. Short interventions are needed on both sides

[Cathy Jamieson]

I gave way because I respect what the hon. Member for Brighton, Pavilion (Caroline Lucas) has to say, but I hope she will understand the real pressures on families and the pressures that individuals are facing as they try to get to work and go about their business.

It is not just Labour that is calling for the increase to be postponed. FairFuelUK, backed by the RAC and the Road Haulage Association, among others, has consistently and determinedly campaigned for lower fuel duty.

[Mr Gerry Sutcliffe (Bradford South) (Lab)]

The public are seldom interested in Opposition day debates, but they are interested in this one. My constituents have contacted me about it. Many organisations have contacted us because they care passionately about the issue. Should the Government not recognise that this is a big worry for all our constituents?

[Cathy Jamieson]

I hope the Government recognise that this is a big worry for constituents. We are all familiar with the e-mail campaigns and the correspondence that we have had through the FairFuelUK campaigns and from our constituents. FairFuelUK has produced a comprehensive report, which I know it has presented to the Chief Secretary to the Treasury. It sets out the impact of retaining the January rise, and gives a stark warning that about 35,000 jobs could be at risk.

[Mr John Redwood (Wokingham) (Con)]

Will the hon. Lady give way?

[Cathy Jamieson]

No, I want to make a little progress.

The Federation of Small Businesses says that 85% of its members said that their car or van is crucial or very important to their business, and just over half its members said that rising fuel costs were one of the main concerns for their businesses in the third quarter of 2012.

[Mr Redwood]

rose—

[Cathy Jamieson]

No. I have given way already and I want to make some progress. It is important that people hear why we are proposing the motion tonight.

Almost 20% of FSB members identified fuel costs as a barrier to growth. Not only those organisations but—[Interruption.] Hon. Members on the Government Benches—those who tend to think they are the champions of industry—might want to listen to the voice of industry. The Petrol Retailers Association has reminded us of the impact of VAT and the impact on the price of fuel if the 3p per litre increase goes ahead in January.

Those are the voices of industry, but it is not just industry that will be affected:

“We must remember that motorists are not a lobby group. They are mums driving to school, children on buses and pensioners hit by inflation. When the cost of road haulage rises, the price of everything else rises too.”—[Official Report, 23 May 2012; Vol. 545, c. 140WH.]

Credit where it is due—those are not my words; they are the words of the hon. Member for Harlow (Robert Halfon) in a Westminster Hall debate in May 2012.

[Robert Halfon (Harlow) (Con)]

I am hugely grateful to the hon. Lady for giving way, but my constituents in Harlow will have much more trust in the Chancellor, who cut fuel duty last year, which the Opposition opposed, and provided two fuel duty freezes, than in the political opportunism that the hon. Lady is proposing today.

[Cathy Jamieson]

I am genuinely sorry that the hon. Gentleman adopts that tone because I know that he has worked determinedly to raise the issue. I am sure that his constituents will want to know exactly what the Chancellor is going to do. Our shadow Chancellor has said what he thinks, whereas the Chancellor seems to be debating by a nod and a wink, and nothing is determined.

[Mr Redwood]

rose—

[Cathy Jamieson]

Those on the Government Benches may want to listen to the consumer organisation Which?. It has told us that 85% of people polled recently were worried about the cost of fuel. That is up nine points since the previous poll in July. One in 10 people polled admitted that they had had to dip into savings to meet the costs of motoring. Many of these people rely on their cars to get to work, to get their kids to school, to take up education and training opportunities, or perhaps to care for elderly relatives.

As I said earlier, these are tough economic times and hard-pressed families out there know that only too well. They are the ones who are suffering most from this out-of-touch Government’s failed austerity plan, which has delivered the longest double-dip recession since the second world war—a plan that is failing on the deficit, with borrowing higher so far this year than last.

[Several hon. Members]

rose—

[Cathy Jamieson]

Not only are the Government’s plans failing—they are also deeply unfair.

[Several hon. Members]

rose—

[Cathy Jamieson]

I will give way in a moment, but it is important that this is heard.

The Prime Minister once promised not to balance the books on the backs of the poor. He also says that we’re all in it together, so perhaps the hon. Member for Nuneaton (Mr Jones) would like to tell me what his constituents think should be done in January. Should the 3p rise be delayed?

[Mr Marcus Jones (Nuneaton) (Con)]

I thank the hon. Lady for giving way. She said that we should listen to the voice of industry and of consumer groups. Did the Labour party listen to those groups when it put fuel duty up by 55% during its time in government?

[Cathy Jamieson]

Again, I regret the tone of the hon. Gentleman’s contribution. This is one issue on which we had the opportunity to unite and send a message to constituents, to all those who have contacted us and to businesses that are struggling, that the whole House could come together and agree. It is disappointing that the parties on the Government Benches have not done that.

My constituents and others are disappointed that while the Prime Minister and the Chancellor focus on giving tax cuts to millionaires, millions of families, businesses and pensioners are being forced to pay more. The cuts in child tax credits and child benefit, the hike in VAT and the cuts in age-related personal allowances have hit people hard throughout the country, just at the time when they and the economy need help.

The Leader of the Opposition has called this slow, remorseless squeeze

“a quiet crisis that is unfolding day by day in kitchens and living rooms in every town, village and city up and down this country”.

That is exactly what it is.

[Several hon. Members]

rose—

[Cathy Jamieson]

I will give way in a moment.

I suspect that I can predict what those on the Government Benches are going to say. They will tell us that we should celebrate the fact that the economy is finally out of a double-dip recession and things are back on track. Perhaps the hon. Member for Sherwood (Mr Spencer) is, however, going to tell me how many e-mails and letters he has had, asking him to back the 3p cut.

[Mr Mark Spencer (Sherwood) (Con)]

Does the hon. Lady acknowledge that words are cheap and deeds are what count? That is a simple philosophy. Her Government put up the tax and our Government have frozen it. It seems simple to me.

[Cathy Jamieson]

I agree that words are cheap and deeds are more important. That is why every constituent is going to be looking tonight to see which Lobby hon. Members are walking through and whether they back the delay or not.

[Several hon. Members]

rose—

[Cathy Jamieson]

I want to move on, because it is important that we get to the meat of the debate.

As has been said in earlier discussions on the economy, any recovery we have seen so far is fragile at best. Labour has put forward proposals that we believe the Government should put in place: a jobs plan to boost the economy, including using funds from the 4G mobile auction to build 100,000 affordable homes; a temporary VAT cut, which would cut around 3p off the price of a litre of petrol and give an immediate £450 boost for a couple with children; help for our high streets and pensioners; and a bank bonus tax to fund jobs for young people who are out of work. The Opposition believe that the Chancellor should use his autumn statement to help those on low and middle incomes with the rising cost of living.

[Charlie Elphicke]

Will the hon. Lady give way?

[Cathy Jamieson]

I have given way to the hon. Gentleman already and want to make some progress.

We believe that the Chancellor should rethink his plan to give a tax cut to millionaires in April while putting up taxes for pensioners. As the shadow Chancellor announced on Friday, we believe that the Chancellor should cancel the 3p rise in fuel duty planned for January until at least April.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

Does the hon. Lady agree that one of the unfairest aspects of the planned duty rise is the disproportionate effect of such taxation on folk in rural areas, as they have no alternative forms of transport and have further to travel?

[Cathy Jamieson]

The hon. Lady makes a valid point. I am certainly well aware of the problems faced by people in rural areas where there might be no alternative. I hope that she will support our motion this evening.

The Chancellor and the Prime Minister might never have had to worry about the cost of filling up their cars, but millions of people across the country worry about that every day, as we are hearing. To be fair, some Government Members recognise that and have been vocal about it, or at least they were until today, when they suddenly appeared to go quiet.

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

Surely this is a no-brainer. If the Chancellor decided before August to freeze fuel duty and not introduce the additional 3p rise, surely the same logic should be used today, when fuel costs even more, and the increase should not be introduced in January.

[Cathy Jamieson]

My hon. Friend makes a valid point. We have neighbouring constituencies, so I am certainly aware of the difficulties some of his constituents face in trying to access fuel at an affordable cost. He will also be aware that although there have been some price reductions by the big supermarkets, which can afford to use fuel as a loss leader, the small and independent garages, many of which his constituents rely on, do not have that luxury. Many of those small retailers are under increasing pressure as a result of tighter margins and are having to take smaller deliveries of fuel to ensure that cash flow does not become a problem. Those are often the businesses that serve rural areas. If they cannot continue to operate, customers will face having to travel many more miles just to fill up the tank.

It was only after pressure from Labour and campaigns such as FairFuelUK that the Chancellor decided to delay the last rise until 2013. Indeed, if we look back on what could be called the fastest U-turn in history, we see that he backed down only hours after Labour called for that help for businesses and families. We welcomed his climbdown then, and we and millions of motorists up and down the country would welcome a renewed commitment from the Government.

[Andrea Leadsom (South Northamptonshire) (Con)]

rose—

[Cathy Jamieson]

I will give way to the hon. Lady if she can give that commitment.

[Andrea Leadsom]

Does the hon. Lady acknowledge that it was her Government who put in place the fuel duty escalator, which is the whole problem facing British motorists today? Does she accept that?

[Cathy Jamieson]

The hon. Lady must also recognise that it was in her Government’s Budget. What we are asking the Chancellor to do is listen. We have heard a great deal about how he is in listening mode, but I do not know how long he must listen before making the decision. According to the House of Commons Library, the cost of delaying the fuel duty rise again until April 2013 would be around £350 million, and we think that could be paid for through a clampdown on tax avoidance. I am conscious that the right hon. Member for Wokingham (Mr Redwood) wishes to intervene.

[Mr Redwood]

I am very grateful. Will the hon. Lady explain which specific tax loopholes Labour would close that the Government are not already closing, and why does Labour not provide any money after April when they would be putting the tax up again?

[Cathy Jamieson]

I absolutely will explain that. We think that there are loopholes that can be closed, and I am sure that the Government will also want to close every possible loophole. For example, there is a growing problem with some employment agencies forcing workers to become employees of umbrella companies. They then falsely inflate the workers’ travel and other expense claims, reducing tax and national insurance and pocketing the avoided tax as profits. Her Majesty’s Revenue and Customs forecast in 2008 that the cost to the Exchequer of that avoidance would be around £650 million by 2012-13. More recent reports have suggested that the current tax loss could be as high as £1 billion. Even if only a proportion of that money was recouped, it could pay for the fuel duty rise to be postponed.

As I said earlier, I know that many Government Members feel strongly about this issue. We have heard over the weekend and today all the talk about the Chancellor being in listening mode, but at the same time the Treasury’s official line is that no decision has been taken. Nods and winks are no good to families struggling in the run-up to Christmas. The approach that says “It will be all right on the night” is no use to the small business trying to balance the books and plan for the first quarter of next year. If the Chancellor has made up his mind to delay the duty rise, his Ministers should say so, and they should say so today. If we do not hear that announcement loud and clear, every hon. Member who wants to see the increase dropped should not only talk the talk tonight, but walk the walk; they should walk into the Lobby with us and vote for the 3p increase to be delayed.