Fuel Prices and the Cost of Living

Gemma Doyle Excerpts

Wednesday 16th March 2011 Commons Chamber

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

I am delighted to speak in this debate, which is an important opportunity to highlight the real difficulties faced by people the length and breadth of the country as a consequence of the record price of fuel at the pumps and the squeeze that is being forced on people’s incomes by the Government. Those issues, along with the reckless pace of public spending cuts, are the concerns most widely raised by people in my constituency, and it is easy to understand why. The area has significant economic challenges, which are being made much greater in the current climate by the Government’s approach to the cost of living.

Unemployment in West Dunbartonshire is higher than across the rest of Scotland and the UK. According to the latest figures, published today, the local claimant count has risen to 6.5%, compared with 4.3% for Scotland and 3.8% for the UK as a whole. Recent analysis of pay across Scotland has highlighted that wages in West Dunbartonshire are 11% below the Scottish average, and of course unemployment and low pay have a clear relationship with poverty. West Dunbartonshire has a disproportionately high number of people living in deprivation, and people living there have a disproportionately low life expectancy. I say that not with pride, but to try to communicate to the Government the challenges found in areas such as mine—challenges to which they have seemed impervious, particularly in this debate.

West Dunbartonshire has a high percentage of people employed in the public sector. Of course, the Government are slashing jobs in the public sector; they seem to believe that the private sector will magically rush in to fill the gaps in employment. The last thing any business needs to contend with at the moment is record fuel prices. Far from growing the private sector, they may mean that even more people lose their jobs. Just this afternoon, the owner of a delivery business in my constituency contacted my office to outline the impact of record fuel prices on his business.

Given all those factors, it is clear to see why people in West Dunbartonshire are struggling to afford the squeeze on their family budgets and businesses as a result of record fuel prices, rising inflation, and cuts to the help for families on low and middle incomes.

[Justin Tomlinson (North Swindon) (Con)]

I agree with the hon. Lady’s comments on the effects of high fuel costs. Does she agree that there should be some regret for the Labour Government’s 12 fuel duty increases?

[Gemma Doyle]

There should be regret that this Government have raised VAT to 20% with no regard for people in my constituency. Never before have people in West Dunbartonshire been forced to pay £1.36 for a litre of unleaded or £1.43 for diesel, as they do now at some local forecourts. Every time they make a trip to the filling station, they find that it costs them a bigger share of their income to fill up their car.

As we know, the recent spike in the price of fuel has been driven in part by rising world oil costs, especially as a consequence of the crisis in the middle east, but the Government have heaped unnecessary extra pain on people by hiking VAT to 20%, adding 3p to a litre of fuel. It is astonishing that the Government have acted so callously in driving up the cost of fuel, given the pre-election promises made by both the Conservatives and the Liberal Democrats last year. I am sure that I am not the only Member who saw leaflets promising action to keep fuel prices down circulated at the last election by one or both parties, although to the best of my knowledge, the Lib Dems did not even bother using their Royal Mail freepost in my constituency in the election last year.

That the price of fuel at the pumps is now at a record level as a consequence of the Government’s actions is an unforgivable betrayal, but that is of course something that we are getting used to from the Government. The attack on ordinary families’ standard of living goes much further than rising fuel prices driven by the actions of this Government. The VAT hike will cost families with children around £450 a year. Unfair cuts to tax credits, child benefit and housing benefit will further erode the incomes of families who rely on that support.

[Pamela Nash (Airdrie and Shotts) (Lab)]

Does my hon. Friend agree that the Government have failed to recognise the impact that the VAT rise on fuel will have even on products that are protected from VAT, such as food and children’s clothing?

[Gemma Doyle]

My hon. Friend makes a significant point. I was about to say that a number of factors are adding up to put intense pressure on family incomes. For example, 1,000 families in my constituency will lose a further £400 a year as a result of the Government’s cuts to the child care element of the working tax credit. What makes that all so much worse is that while the Government are choking off help for hard-working families and recklessly cutting jobs and services, they have given the banks a huge tax cut this year. I know my constituents find it hard to understand how that can be squared with the Prime Minister’s claim that we are all in it together—a frankly laughable claim from a Cabinet of millionaires. [Interruption.] I am sorry if Government Members do not like to be reminded of how many millionaires are in the Cabinet, but I am afraid that that is a matter of fact.

The Government have heaped pain on families, but they could have made a different choice and relieved some of that pain. As my hon. Friend the Member for Wallasey (Ms Eagle) said, the Government could use the £800 million raised from the bank levy immediately to reverse the VAT rise on fuel. Just as the previous Government often postponed fuel duty rises when oil prices were rising, as they are now, the Chancellor should look again at the Budget—that is why he should be here today, listening to the arguments—ahead of the planned 1% rise in April.

[Charlie Elphicke]

Has the hon. Lady considered that the reason the Chancellor is not here today is that he is busy trying to sort out the Budget to undo the massive financial mess left by the Labour Government and deal with their economic incompetence?

[Gemma Doyle]

It is the duty of the Chancellor to listen to Members as he is putting together his Budget. Both he and the Chief Secretary to the Treasury should be present, listening to Members as we debate this important subject.

I have outlined a different approach, which would be the right approach. I notice that none of the Scottish National party MPs is present. Their proposal for a fuel duty cut in remote areas would do nothing to help my constituents in West Dunbartonshire. The name of the constituency may include the word “shire”, but on the whole it is not a rural area, although a small number of my constituents would consider themselves to be in a remote area. The majority of my constituents live in an urban or a suburban area and they are struggling with the record price of fuel. We need to go much further and bring down fuel costs for everyone in urban and rural areas.

I will of course support the motion in the name of the Leader of the Opposition. The Government can and must take action to provide some relief to people in my constituency and across the country. They can do this in the ways outlined today. Like numerous other Members, I urge the Chancellor to take that action and go some small way towards showing that he has not completely lost touch with the pain that British motorists are suffering.