Fuel Duty

Greg Smith Excerpts

Wednesday 18th March 2026 Commons Chamber

[Greg Smith (Mid Buckinghamshire) (Con)]

I am grateful—

[Madam Deputy Speaker]

Order. Is the Member taking the intervention?

[Siân Berry]

I give way to the hon. Gentleman.

[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.

--- Later in debate ---

[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.