MPs urge ministers to scrap a planned rise in fuel duty

 
Petrol pump Ministers say they have acted to alleviate the burden on motorists

The government should scrap a planned increase in fuel duty to help "hard-working, vulnerable Britons", a Conservative MP has said.

Robert Halfon said the government must show it is one "that cuts taxes for millions of British people and not just for millionaires".

He tabled a Commons motion urging action on fuel prices in response to an e-petition signed by 110,000 people.

It was approved by MPs without a vote but it is not binding on ministers.

Treasury minister Chloe Smith said the government was listening to people's concerns but "now was not the time" to change duty rates as such decisions must wait for the Budget.

The government plans to increase fuel duty by 3p a litre in January - meaning an extra £1.50 to fill an average car - and Chancellor George Osborne is under pressure to scrap that as part of his autumn statement on the economy later this month.

Petrol prices have tripled in the past two decades, but ministers say prices would be even higher had they not scrapped automatic fuel-tax increases imposed by Labour.

Mr Osborne scrapped the annual fuel tax escalator - a mechanism under which duty rose by 1p above inflation every year - and cut fuel duty by 1p in March's Budget.

However, he has only postponed the planned inflation-linked part of the duty rise from April 2011 to January 2012, and from April 2012 to August 2012.

Opening the debate, Mr Halfon said: "Fuel duty is not just about economics, it's an issue of social justice and this is especially true in rural communities which are being destroyed by fuel prices."

He said the government had to be "realistic and truthful about who pays the lion's share of fuel duty".

Petrol and diesel prices versus the oil price

"It's ordinary families driving to work, it's mums taking their children to school, it's small businesses who can't afford to drive a van or their lorry, it's non-motorists who depend on buses who are also being crushed by rocketing food prices as the cost of road haulage goes through the roof."

'Inelastic'

In his motion, Mr Halfon urges ministers to consider whether current fuel tax rates are economically competitive; what impact they are having on economic growth and unemployment levels; and to examine the case for a price stabilisation mechanism to even out fluctuations in pump prices.

The Treasury has already said it will introduce a "fair fuel stabiliser" to ensure price rises are capped to inflation when oil prices are high.

Lib Dem party president Tim Farron agreed that people in rural areas were hardest hit because "demand is so inelastic for petrol because people have only one way of getting to work".

AA president Edmund King: "High fuel prices are already bringing in record amounts of tax"

Labour have welcomed the chance for a debate on the issue, but said there must be "concrete action" to help business and families rather than "warm words".

The party's leadership had backed an amendment by backbench MP Dave Watts urging the government to reverse January's rise in VAT to 20% - which they say would cut 3p off the price of a litre of petrol.

Russell Brown, MP for Dumfries and Galloway, said: "I have some people in remote areas who have discovered that to get to work has become far too costly and some of these people are considering giving up working all together."

Conservative Caroline Nokes, MP for Romsey and Southampton North, highlighted the struggles of haulage companies.

"Profit margins for hauliers are very tight. This makes it a very vulnerable business and in particular fuel companies are not willing to extend credit terms, leaving payments in some cases to as little as three days.

"Now when haulage firms may not be paid for work for up to 60 days, this proves to be a very hand-to-mouth industry and companies can only afford to think ahead to January."

Motorist: "Petrol prices are appalling at the moment"

The AA said the latest fuel price rises were already impacting on drivers, and that for the average motorist the planned increase would equate to an additional £38 a year at the pumps.

AA president Edmund King told BBC Radio 5Live the AA's latest survey showed that some 70% of motorists were already cutting back on journeys - or other expenditure, like food shopping, to pay for petrol.

He said price increases were "socially divisive", saying the nation was being divided into "drives" - people who can afford to drive - and "drive nots".

'Strangling the economy'

Motoring journalist Quentin Willson, who speaks for FairFuel UK, a pressure group behind the e-petition, said he and others "want the whole fuel pricing issue to become open and transparent", adding that high fuel duty is "strangling the economy".

"There are desperate, desperate people who cannot afford to use the roads. The effect on society at the moment has been absolutely desperate. Fuel duty is strangling us," he said.

Meanwhile, Richard Hebditch, of Campaign for Better Transport, said the "big problem" is that Britons are reliant on their cars and dependant on foreign oil supplies, which are "quite risky oil supplies".

He said: "What we need to do is take the money from fuel duty and invest it in giving people real alternatives and modernising our transport systems so we aren't so dependant on foreign and risking oil supplies."

Tuesday's debate, which lasted three hours, was approved by the Backbench Business Committee.

How the cost of petrol and diesel breaks down
 

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  • rate this
    +140

    Comment number 67.

    My job was moved to a base 15 miles away, i had no say in this. There is a bus every 2 hours, so it's not an option to use this, and anyway I sometimes need to go and visit clients in an emergency, so I need a car at work, and one isn't provided. My wage hasn't gone up in 3 years. I live in the country. Would the muesli-knitting brigade care to tell me how to manage?

  • rate this
    +1

    Comment number 66.

    Time to get rid of the .9 of a penny on all forecourt prices. 30 litres = 3p, and what quantity of a litre is 3p? is anyone else bothered by this?

  • rate this
    +22

    Comment number 65.

    Running a small business I feel the fuel prices a lot. Messing around with VAT on a regular basis probably costs us more - This really should be set at 17.5% and stay there. I wouldn't mind the current fuel price if other pressures were applied to car manufacturers to push electric investment further. Just bringing the price of fuel down is helpful but isn't the answer to the real problem.

  • rate this
    +6

    Comment number 64.

    It is a corporate con, just like domestic energy prices. When wholesale prices rise the rise in "at the pump costs" is immediate - if it goes the other way we are told that it takes time for prices changes to feed through and you guessed it they never drop in the way that they increase. Gov & Fat Cats win everytime.

  • rate this
    +7

    Comment number 63.

    Possible 3 line whip on this vote also (Remeber the Referendum question). Democracy alive and well in the UK.. I wish

    No real Democracy
    No real Industry
    No real Government

    Oh and the increase will help public transport. Yes well I need a high speed train from Brimingham to London when I live in Leeds don't I Idiots

    Shocking

  • rate this
    0

    Comment number 62.

    Go on George, cheer us all up.
    God knows we need it.

  • rate this
    -3

    Comment number 61.

    Sorry, but I fail to see how the government sees any logical reason to increase fuel duty by 3p per litre. The government is throwing tonnes of money away to new roads (that I don't think we need) - even when the number of road users overall is actually decreasing. The government seems to think increasing tax in a decreasing market will fill the gap in fuel tax taking, I beg to differ.

  • rate this
    -2

    Comment number 60.

    WHHATT!!?? I am already suffering the poverty disease from the overhiked fuel charges that our government have infected our nation with!

    The enterprise zones scheme and new business startup stuff thats been on the news this last year is surley a contradiction of this increase as new businesses cannot afford to be giving the school bullys their dinner money! how many things can we get taxed on???

  • rate this
    +5

    Comment number 59.

    Isn't the government profiteering when nearly two thirds of the price at the pumps goes on taxes? Some people need to drive to work and keep the economy flowing, not just sit back and claim benefits while bleating on about green being a necessary pill we must all swallow. Sure, we can look for alternatives without destroying the businesses of those people who are trying to earn a living today.

  • rate this
    +3

    Comment number 58.

    If it moves, tax it.....and cars do move quite fast!

  • rate this
    +1

    Comment number 57.

    I think the real problem is what the increase will be used for ,not to reair and improve roads ,not to improve the NHS , Armed Forces or Police force in this country ,if that was the case then it would be more bearable, the annoying fact is it will be used to prop up Countries who are in dire straights because they have all been fiddling their taxes for years so need ours to go up to bail them out

  • rate this
    +2

    Comment number 56.

    If all these MPs made the same level of noise about the outrageous increases in train fares then they might have some credibility, as it is they are just pandering to the motoring lobby. My season ticket to commute to work by rail has increased by over 40% over the last 4-5 years.

  • rate this
    +3

    Comment number 55.

    Stupid idea. The govt are supposed to be trying to bring inflation under control yet they want to add to its woes.
    I repeat..STUPID

  • rate this
    +14

    Comment number 54.

    It is extremely annoying that the petrol companies use the price of oil as a justification for increasing prices when it goes up. When however the price is down they don't however follow suit in reducing the pump price.

  • rate this
    +3

    Comment number 53.

    Imagine bus and train fares were charged at what it costs (double without subsidy) doubled again with duty , add vat.£10 bus fare anyone?

  • rate this
    +11

    Comment number 52.

    A substantial fuel cut, say 30p - 40p, would kickstart an economic recovery, if even a small one. There can be NO viable alternatives to private transport for people living out of major towns & cities. A friend in rural Wales pays nearly £3 to travel 5 miles by bus! Here in Scotland, we need our 4 x4s (enabled my partner to get into work in the snows last winter) & rural fuel prices are insane.

  • rate this
    -5

    Comment number 51.

    According to the AA, the UK has the eleventh highest petrol price in Europe.

    [Unsuitable/Broken URL removed by Moderator]

    So stop complaining.

  • rate this
    +5

    Comment number 50.

    Faced with two stark choices, that of inflation or deflation (the collapse of the monetary system) and contrary to popular belief, this government are actively pursuing an inflation policy.

    This policy will wreak havoc on the economy, and depression will ensue. The game is up for our monetary system, it has reached it's natural limit.

  • rate this
    -4

    Comment number 49.

    But what about global warming???

    For every 100 quid you hand over...you get 20 quid of fuel and the planet gets 80 quid

    On behalf of all the beautiful fluffy polar bears and penguins of the world, we thank you for your sacrifice.

    David Cameron
    Emperor of all the Penguins

  • rate this
    -3

    Comment number 48.

    I thought the goverment said we are all in this together? they should ignore the fuel lobby if petrol is to expensive drive less. walk the kids to school instead of getting the 4x4 out for a five minute journey,

 

Page 52 of 55

 

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