Road Fuel Duties

Guto Bebb Excerpts

Tuesday 13th September 2011 Westminster Hall

[Mr Donohoe]

That was one of my conclusions, so it is useful that the hon. Gentleman has made that point. This morning, the Fair Fuel UK campaign e-mailed me, as I am sure it mailed everybody. Like everybody in this room, barring perhaps the Economic Secretary, I signed the e-petition. As a consequence, only 17,000 signatures are now required to reach 100,000. I urge everybody—not just those here but anybody listening to this debate who is concerned about high fuel prices—to sign the petition so that a full debate can be held. This is, after all, only an Adjournment debate. Important as it might be, we need a full debate in the House with the Government leading. I look forward to it.

In conclusion, we must consider the issues that I have highlighted. The Government know that the Labour party opposes 20% VAT, which has helped to push up petrol prices to their current levels. I did not realise until I was preparing for this debate that VAT is put on top of the tax, so the duty is taxed with VAT. If the tax is 50p, 20% VAT is put on top of that fuel duty. The Government should look at that. If, as is being argued, a reduction in VAT is not an option because of the bureaucracy across the water in Brussels, we could consider a reduction in fuel duty to lower the cost of taxation, which, as I have said, is initially some 80p per litre. The Economic Secretary and the Treasury should look at that.

[Guto Bebb (Aberconwy) (Con)]

On VAT, I have been in discussions with a representative from a coach company in my constituency, which has put on hold plans to employ more staff because of the extent of fuel duty. One of the issues that he raised was VAT. He actually argued in favour of a higher rate of VAT for diesel and petrol, because, as a business, he can reclaim the VAT but not the fuel duty. I wonder whether the Treasury has an opinion on that.

[Mr Donohoe]

That is a matter for the Economic Secretary, not me, to address, but I am grateful to the hon. Gentleman for his intervention. A tax increase is being proposed for next January and August, but I would like an assurance from the Economic Secretary that it will not be implemented. The best way to help hard-pressed consumers would be for the Government not to adjust the tax on families, who are already feeling the squeeze as a consequence of the Government’s policy on pay freezes and pension hikes.

We also have to look at the big six energy providers, which recently announced large price rises and bigger profits. The Government must have scope to look at that in order to redress, via a windfall tax, the whole problem of taxation. There is also the issue of the Government’s policy—if it is a policy—to move people from the road to public transport. The Government have just increased the cost of rail travel by 10%, which seems to go against everything that is being argued. Is that policy supported and likely to continue to be supported by the Treasury?

A number of representatives from rural areas are present. More emphasis needs to be put on trying to allay the problems associated with living in the countryside, which are an enormous burden on businesses and the consumer in those areas. I have already mentioned the removal of the duty differential for biodiesel, but the position of that industry needs to be addressed by the Government. It is a growing industry and one that is useful in addressing both public and private transport in my constituency. I have already mentioned the prices set by supermarkets and oil providers, which have to be addressed.

I have two final points. The Government must reduce the tax on petrol. That would increase employment prospects, particularly those of the nurse whom I mentioned earlier, as well as those of people who rely on public transport to get to work. Finally, I am old enough to remember when fuel prices were fixed universally throughout the whole country. A lot of the commodities that were deemed at that time to be essential, such as bread and milk, were all the same price. Given the disparity between the highest and lowest price in this country, will the Government examine the issue so that the disparity is overcome and the price of petrol is not a commodity with which the supermarkets and some of the country’s suppliers play?