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Economic Performance

Volume 547: debated on Tuesday 26 June 2012

As the Office for Budget Responsibility made clear last autumn, Britain’s recovery has faced strong headwinds from the euro area, high oil prices and the impact of the financial crisis being deeper than previously thought. Our actions to reduce the deficit and rebuild the economy have secured stability and kept interest rates near record lows, benefiting families, businesses and taxpayers, although, of course, considerable external risks remain.

That just does not wash, because by May 2010 the British economy was growing, whereas since the Government’s emergency Budget of June 2010 the economy has at best flatlined and at worst dropped back into recession. Why does the right hon. Gentleman think that is?

By May 2010, the hon. Gentleman’s Labour Government had put in place plans to increase fuel duty by above the rate of inflation each and every year of this Parliament. He should be welcoming the fact that we are taking steps to support hard-pressed families and hard-pressed consumers across the country in the very difficult economic circumstances that we face.

Does my right hon. Friend agree that motorists across the country will welcome the cut in fuel tax announced for August and that it will greatly improve the performance of the economy? Does this not show that the Government are on the side of hard-pressed working people?

I agree entirely with my hon. Friend. I met representatives of the FairFuelUK campaign yesterday. We have a great deal of sympathy with its arguments, as well as with those made by families across this country, including in remote and rural areas. It is worth saying that thanks to the decisions this coalition Government have made not only is fuel tax 10p a litre lower than under Labour’s plans, but council tax is lower and income tax is lower. In the Budget in March we also saw the largest ever increase in the income tax personal allowance, all of which puts money back into the pockets of hard-pressed families.