Fuel Prices and the Cost of Living

Charlie Elphicke Excerpts

Wednesday 16th March 2011 Commons Chamber

[Ms Eagle]

My hon. Friend fingered the right hon. and learned Member for Rushcliffe, but in fact the fuel duty escalator was introduced in 1993 by a person who is now in the other place, Lord Lamont—

[Charlie Elphicke (Dover) (Con)]

rose—

[Brandon Lewis (Great Yarmouth) (Con)]

rose—

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[Ms Eagle]

It did escalate. It is also true that it escalated for one year when we came into government, but we had six years when we did not increase fuel duty at all—not even in real terms. Fuel duty escalators need to be applied sensitively.

[Charlie Elphicke]

rose—

[Ms Eagle]

I am more than happy to give way to the hon. Gentleman.

[Charlie Elphicke]

I thank the hon. Lady for her kindness and generosity in allowing me to intervene. To clear up the addling of some minds in the House regarding the history of this matter, will she confirm that in 1997 duty was 36.86p and today it is 57.19p?

[Ms Eagle]

One has to remember that the price of petrol at the election was £1.20 a litre, at a time when the Conservatives were promising to cut 10p off the price of a litre because petrol prices were too high. It is now £1.32 a litre.

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[Brandon Lewis]

rose—

[Charlie Elphicke]

rose—

[Sajid Javid (Bromsgrove) (Con)]

rose—

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[Andrew Bridgen (North West Leicestershire) (Con)]

rose—

[Charlie Elphicke]

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[Ms Eagle]

It is clear that the policy can be introduced only at the risk of injecting huge and dangerous uncertainty into the public finances. I give way to the hon. Member for North West Leicestershire (Andrew Bridgen).

[Ms Eagle]

One minute Government Members say that we have no plan to deal with the deficit, and the next minute they complain that we had a plan that would have raised money. They really do try to have it both ways and are not remotely coherent.

The time for action is now. The Chancellor should take immediate action on fuel prices to ease the cost of living crisis in Britain. He does not even have to wait until the Budget. We are calling on him to reverse immediately the 2.5 percentage point increase in VAT on petrol that he imposed in January.

[Charlie Elphicke]

rose—

[Sajid Javid]

rose—

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[Justine Greening]

My hon. Friend is absolutely right. In fact, the EU directive on VAT states:

“Member States may apply either one or two reduced rates…The reduced rates shall apply only to supplies of goods or services in the categories set out in Annex III.”

That annex does not include road fuel, and other amending articles do not permit a reduced rate or exemption to be applied to transport fuel. That in is European Council directive 2006/112/EC of 28 November 2006 on the common system of value added tax, at article 98 and annex III.

[Charlie Elphicke]

In the light of what my hon. Friend has just said, is not the motion before the House a shamelessly opportunistic preying on the justly held fears of the British people about the cost of fuel?

[Justine Greening]

That is absolutely what it is, and it is something else as well—it is a smokescreen. The Labour party has no plan whatever to tackle the deficit, and this Opposition day debate is all about trying to divert attention from that. It had no plans when it was in government, and it has no plans now it is in opposition.

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[Fiona O’Donnell]

Thank you, Mr Deputy Speaker. I am obviously going to have to treat the Minister with kid gloves as she is so sensitive.

East Lothian is a largely rural constituency made up of small gatherings of communities that rely heavily on the use of their cars. I suspect that the hundreds of e-mails that I have received over the past few weeks will now be followed by hundreds more, as my constituents will be bitterly disappointed by the Minister’s utterly sterile contribution to the debate.

[Charlie Elphicke]

Will the hon. Lady give way?

[Fiona O’Donnell]

Not at this stage.

The e-mails that I have received have not been the standard campaign e-mails that many of us find in our inboxes every day. I have been genuinely moved and angered by the stories that they have told. They have been from motorists, some of them older people living on pensions, people surviving on disability living allowance—Lord knows, they have enough to worry about under this Government—or people stuck on fixed incomes. This rise in the cost of fuel is hitting them hard.

I have also had e-mails from employers in my constituency. East Lothian relies heavily on small employers, but they are struggling. Two have already told me that their businesses will close this month, and that is bad news for East Lothian and for my constituents. We are promised that we will have a Budget for growth next week, but in East Lothian, the Government’s policy is not working; it is going in the opposite direction.

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[Fiona O'Donnell]

Perhaps I have some responsibility here. I have not formally congratulated the Government on winning the general election, so perhaps it is my fault that they have not grasped the fact that they are now in government. They are in a position to change their minds, to lower the VAT rate on fuel and to make a difference to Mr Flynn and to ensure that the people he employs continue to have jobs. I suspect that Mr Flynn will remain disappointed, however. We were certainly not planning to increase VAT or to make life even more difficult for people.

[Charlie Elphicke]

Will the hon. Lady give way?

[Fiona O'Donnell]

No thank you.

Then there is the case of Mary Johnston from Haddington, who said:

“My husband and I are senior citizens. We live in a farm cottage 2.5 miles outside Haddington”.

Let me summarise by saying that the rising costs of motoring are making it virtually impossible for them to leave their house. I hope that at some point during this debate we will hear some words of comfort from a Government who have let down my constituency.