By Joseph Willits
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Yesterday Robert Halfon's motion urging the Government to consider scrapping any further increases in fuel duty passed without a division. The debate was forced by an e-petition, which attracted over 100,000 signatures. Halfon had the backing of The Sun's Keep It Down campaign and FairFuelUK group led by Quentin Wilson.
The Government's abolition of the fuel escalator was welcomed by Halfon, as was the introduction of a semi-stabiliser so "that duty will rise quicker than inflation only if oil prices are low for a sustained period". This had meant that motorists were already making savings of £274 a year on average, in this parliament compared to a different outcome of a Labour re-election. However, Halfon said, Britain's petrol prices "are still the most expensive in Europe. Even bankrupt socialist nations such as Spain now have lower rates of fuel tax than Britain".
An increase in fuel duty would be counter-productive to "the Government’s efforts to tackle the deficit and put the public finances on a sustainable path", he said, with high fuel prices causing "immense difficulties for small and medium-sized enterprises vital to economic recovery".
Halfon stated that "evidence suggests that we are on the wrong side of the Laffer curve and that lower taxes might increase revenues". UK haulage companies, he said, "are being driven out of business as they face higher taxes here than in nearby countries such as Ireland". According to figures from the insolvency firm SFP, "three quarters of transport business failures in the last year have been caused by excessive fuel prices".
In the debate, Halfon was adamant that the increase in fuel duty was not simply an economic issue, and that "tax cutting is a moral creed":
"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."
To justify his point, Halfon used his Harlow constituency as an example:
"In Harlow, the cheapest unleaded petrol costs £1.33 per litre. Most Harlow motorists are therefore spending £1,700 a year just to fill their tanks. For most people, that is the equivalent of £2,200 of income before tax—a tenth of the average Harlow salary".
Halfon's motion called on the Government to do three things:
- "Create a genuine price stabilisation mechanism that smoothes out fluctuations in the pump price".
- "Pressurise the big oil companies to pass on cheaper oil to motorists".
- "Set up a commission to look at market competitiveness and radical ways of cutting fuel taxes in the long term".
Chloe Smith, Economic Secretary to the Treasury, responded for the Government; she apologised for missing the start of Halfon's statement. Smith welcomed the debate, and echoed much of what was said during it. She told the Commons that "the cost of fuel remains a very difficult issue and a concern to many families and businesses across the country", but added that this "is not the day to try to change taxes – that is for the Budget".
Smith attacked Labour, for having "had no plans whatever to support motorists", citing their introduction of a fuel duty escalator. None of their planned increases, she said, were "subject to either oil price or pump price movements".
The planned increase in fuel duty, Smith said, "remained in the Budget: so that we can deal with the record deficit that we inherited", reiterating the need for them in this "time of international instability". They were, she said, part of "the difficult decisions that the Government have taken to tackle the deficit have made Britain safer for householders". Smith concluded by saying that the Government and backbenchers were all on the same wavelength in wanting "motorists to benefit as much as possible from falls in oil prices", yet despite this desire, "the Chancellor has made it clear that although the Government can control the duty rate it cannot control the world oil price".
42 Conservative MPs contriubuted to the debate, which you can read in full here.