Previous SectionIndexHome Page

Mr. James Clappison (Hertsmere): It is a great pleasure to follow my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). I am sure that the House listened with interest to his analysis. If anything, he was unduly modest when he dealt with the history of the matter, and particularly the inheritance that the Government took over from his stewardship of the economy.

My right hon. and learned Friend left the Government a benign economic inheritance and, as he made clear, the Government's principal activity since then has been to tax too much when they did not need to do so. The taxes that are the subject of the amendments are a good example of the Government's inclination towards tax by stealth and to tax as much and as long as possible while they can get away with it. Now, as my right hon. and learned Friend rightly said, after all the Government's boasts about boom and bust, they face a humiliating change of spin but not of policy, with the Chancellor today having to climb down over his claims about the economy and admit what is apparent to many other people--that we are facing a period of uncertainty in the world economy.

I listened with interest also to the opening speech by the hon. Member for Banff and Buchan (Mr. Salmond). I hope that he will forgive me if I say that I feel able to resist the temptation that he presented to us to distribute Scottish nationalist literature throughout England. That is one activity that I can happily do without. However, I acknowledge reluctantly that some of the points that the hon. Gentleman made with respect to Scotland apply to motorists the length and breadth of the United Kingdom. I shall make some particular points about the effect of the Government's policies on Northern Ireland in due course.

4.15 pm

I want to make our position clear at the outset. As my right hon. Friend the shadow Chancellor said, we are committed to cutting duty on fuel by at least 3p a litre. We want to cut petrol tax and to offer some relief to the hard-working families who have to pay too much to the Government every time they fill their tanks. I assure Labour Members that those families will remember that in future.

Mr. Bercow: Of course, my hon. Friend is absolutely right to speak about the impact of petrol tax on hard-working families. However, will he also bear in mind the interests of an appreciable number of people, not

24 Apr 2001 : Column 179

least in rural areas, among whom I number Mrs. Elizabeth Zettl, an 83-year-old woman in Buckingham High street in my constituency? Mrs. Zettl travels around by car to undertake charitable work on behalf of deserving causes. She has been consistently punished by this Administration and she is very angry about it.

Mr. Clappison: My hon. Friend rightly illustrates some of the personal circumstances that lie behind the problems associated with motoring in rural areas. His example concerned somebody who undertakes very commendable activities. The problems that are faced by poorer members of rural communities, who may rely on their cars to make their way from village to village, or from village to supermarket, often seem to be overlooked by the Government, under whom motorists in town and country alike--I shall deal with the special problems of the countryside in a moment--have taken a clobbering.

My right hon. and learned Friend the Member for Rushcliffe was right in his analysis of the history of those problems. Perhaps his words deserve underlining with this fact: in May 1997, the motorist paid an average of 59p a litre to fill up at the pump, but today, he pays almost 76p a litre. For the benefit of Labour Members, we should make it clear where the responsibility lies, as no less than 13p out of that 17p increase arises from additional tax piled on by the Chancellor. As my right hon. and learned Friend said, it was piled on time and time again for as long as the Chancellor thought that he could get away with it. The amount of tax on a litre of petrol in May 1997 was 45.7p; it is now 59p. Let me give one particular motoring example. We have heard something about Mondeo man in the past. A Mondeo man who fills up his tank now pays £10 more than he did before this Government came to power.

I have obtained from the Library figures that are based on the European Union weekly oil bulletin. According to those figures, even after making allowance for when the change in duty on ultra-low sulphur petrol and the temporary change in respect of ordinary unleaded petrol take effect, the United Kingdom still has the most expensive petrol in the European Union. That is the case because United Kingdom motorists pay so much tax and duty. The hon. Member for Banff and Buchan adverted to the fact that tax and duty amount to 75 per cent. of the total price of unleaded petrol at the pump. As was pointed out by one of our tabloid newspapers last week, the United Kingdom has one of the cheapest rates in the European Union for pre-tax petrol, but the most expensive rate for post-tax petrol.

Not least among the implications is that which affects the part of the United Kingdom that shares a land border with another EU member. In the Republic of Ireland, petrol is about 15p to 17p a litre cheaper than in Northern Ireland. The gulf between petrol prices in Northern Ireland and the Republic has been reflected in the growing problem of cross-border fuel smuggling, to whose existence even the Government are beginning to admit, and in the disappearance of petrol retail stations in the vicinity of the border. A significant number of those stations have been lost in the past four years.

The background to our debate is the unprecedented public dissatisfaction with fuel prices that was expressed last autumn. As my right hon. and learned Friend the

24 Apr 2001 : Column 180

Member for Rushcliffe rightly said, the Chancellor was prepared to continue to increase petrol prices, apparently without any rationale or firm policy other than to raise as much revenue as possible from the motorist. He was happy to pursue that course, thus causing more and more pain to motorists, until the general public said that they could take no more.

It was clear last autumn that those who expressed their dissatisfaction and said that they could take no more included pensioners and families on low incomes. High fuel taxation bears down heavily on pensioners and other groups who cannot afford it. However, it is part of the Government's unenviable record of increasing the tax burden on the least well-off in our society. The Institute for Fiscal Studies pointed that out today.

The least well-off include people who want to own and use a motor car. In some rural areas, that is a necessity, as my hon. Friend the Member for Buckingham (Mr. Bercow) made clear. They want to use their cars, but the Government are punishing them with high levels of tax and duty, which contribute to their record of regressive taxation that hits the least well-off the hardest.

My right hon. and learned Friend was right to paint a wider picture to encompass the world economy and the possibility of future increases in the price of petrol. Whatever happens to the price of crude oil, there should be no doubt about where responsibility rests for the relatively high price of petrol in the United Kingdom. Ministers cannot spin away the fact that the Government have significantly increased fuel duty and that 75 per cent. of that high price--the highest in Europe--arises from taxation. The Government must accept responsibility for the high price that motorists pay every time they visit the pumps. They must not be allowed to spin their way out of it.

We shall endeavour to make it clear where the responsibility lies: it lies with the Government, who have lost their grip on policy. They try to increase taxation whenever they can get away with it--when they are not being pressed and buffeted by public opinion. They created those forces by setting such high taxes. Ministers are responsible for the agony that high prices at the pumps cause so many motorists. Responsibility rests with the Government, and they should not be allowed to escape it.

Mr. Michael Moore (Tweeddale, Ettrick and Lauderdale): This has been an interesting discussion, not least for the cameo it has provided of the continuing debate about boom and bust and a possible return to the cycle over the coming months.

Sadly, the debate has lacked any reference to sustainability, or to the role of the environment in the determination of fuel policy and associated matters. I note that no Labour Back Benchers are rushing to participate; I hope that Ministers will address such matters when they respond.

We cannot ignore the difficulties that can arise in balancing the needs of the environment, economic competitiveness and social inclusion, which are the three components of sustainability. The hon. Member for Banff and Buchan (Mr. Salmond) made some important points about the economy and the way in which he sees it developing. I associate myself with his comments and those of other hon. Members concerning the sad news about Motorola jobs in central Scotland. Our rural

24 Apr 2001 : Column 181

communities are suffering greatly from foot and mouth, and it is therefore right to place emphasis on the way in which we tackle the economic problems that affect the whole country.

In the past two or three years--and especially in the past 12 months--the fuel price issue has been buffeted around. When things came to a head last autumn, we acknowledged that there had to be an accommodation and that we had to keep all parts of the sustainability argument in kilter. In the past, it was important to support the fuel duty escalator for environmental reasons, but changing circumstances meant that it had to alter.

We have been advocating for a long time that there should be a freeze on fuel duty in real terms for the lifetime of this Parliament, and, indeed, the next one. After the events of last year, we would like to have seen a return to the travelling public of the windfall VAT receipts that the Treasury obtained and pocketed for other purposes. It is important to switch car tax aggressively towards encouraging smaller, more environmentally friendly cars and to shift the whole emphasis of our environmental taxation towards congestion charging, recognising, as we do, the need for upfront investment in public transport that will enable us to produce appropriate public transport alternatives.

The pain that many of our communities are suffering has focused everyone's mind. We recognise the difficulties of escalating fuel prices, but we also recognise the opportunities that congestion charging and other technologies will afford us for using a more sophisticated approach to targeting environmental taxation.

New circumstances involving huge increases in world oil prices, followed by massive fluctuations, have been experienced over the past six months. All the parties have had to adjust to that new reality--and some have done so more dishonourably than others. In adapting to the new situation, we cannot let the central idea of sustainability get lost. But alas, that is exactly what is happening, with a Dutch auction under way between the different parties to see which one can promise the most meaningless tax policy changes. We did not hear much about the environment from the hon. Member for Banff and Buchan--nor did we hear much from the right hon. and learned Member for Rushcliffe (Mr. Clarke) about his party's policy on fuel taxation. Sadly, even his Front-Bench spokesman did not provide an answer to that particular mystery.

There is an argument for a cut in fuel duty if it can stimulate changes that lead the market to adopt more environmentally friendly fuels. We support the plans on ultra-low sulphur fuel for that reason, and, if the debate should move on, I hope that my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) will have the opportunity to raise the issue of taxation changes on biodiesel.

Next Section

IndexHome Page