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Vehicle Fuel (Publication of Tax Information)

Volume 620: debated on Wednesday 1 February 2017

Motion for leave to bring in a Bill (Standing Order No.23)

I beg to move,

That leave be given to bring in a bill to require the inclusion on vehicle fuel receipts of the amounts of each tax paid; to require all retail fuel pumps to display the amounts of taxes paid when dispensing fuel; and for connected purposes.

This Bill calls for all taxes to be clearly shown on fuel receipts. Its principle is very simple: taxes should be clear to the people who pay them. At the moment, they are not. The Bill provides motorists with far better clarity on what they are paying—a simple breakdown of fuel duty, VAT and VAT on duty. There is no reason why these measures should be unnecessarily burdensome or expensive to businesses.

I understand that the Treasury is advising motorists who contact it in support of the Bill that it would be impractical to introduce it. My response would be that VAT—one of the taxes in question—is already shown on receipts, and that all that is required for fuel duty also to be shown is a simple arithmetic calculation multiplying the number of litres by the duty per litre. The software cost is minimal. With prices at the pumps rising to their highest for over two years and total taxation of fuel bills hovering between 65% and 70%, it is important that Government are open and transparent. Surely it is right that the nation’s 37 million drivers should see the magnitude of the tax they pay every time they fill up their tanks.

The Government must be commended for freezing fuel duty since 2011. However, the UK remains one of the costliest nations in which to fill up with diesel and petrol. This is solely due to the high tax component in pump pricing. The amount of tax remains a huge issue for drivers. This is a tax on a resource that over 70% of people have no choice but to buy to go about their everyday lives. Total fuel duty revenue is approximately £27 billion per annum, with an additional 20% VAT on the duty itself bringing in an extra £5.24 billion. Once drivers find out about VAT on fuel duty—a tax on a tax—it really rankles and perplexes them.

The Bill aims to give motorists what my right hon. Friend the Member for Ipswich (Ben Gummer) has secured for taxpayers in general as a result of his Statements of Taxation Bill, which he presented on 25 January 2012 and which was subsequently included in the 2012 Budget and introduced in 2014. As a result of his initiative, taxpayers now see how their money is spent, broken down area by area of Government spending.

Council tax payers have the same right. The bills that they will receive this spring itemise what each authority will receive and invariably this bill comes with a letter from council leaders explaining what they will be doing with our money. It is only right that hard-pressed motorists are put on the same level playing field, rather than being continually exploited as a cash cow.

The initiative of my right hon. Friend the Member for Ipswich was an important step along the road to full tax transparency. It is now important to complete this journey, so that motorists are able to hold Government to account. It must always be remembered that it is their money, not the state’s.

I commend my right hon. Friend the Member for Harlow (Robert Halfon), who presented a very similar Bill to this on 16 October 2012. He has been a real champion of motorists and it is important that we build on the great work he did in helping to secure successive freezes of fuel duty.

It is also appropriate to pay tribute to the tremendous campaigning work of FairFuelUK, and its founders Quentin Willson and Howard Cox, for standing up for the motorist at every turn in the road. I am grateful for the support that I have been provided by the all-party group on fair fuel for motorists and hauliers chaired by my hon. Friend the Member for Dover (Charlie Elphicke). It is appropriate to highlight the pump watch app that FairFuelUK is launching, which shows how much UK drivers would pay for the same number of litres that they have just bought if they had bought them in 23 other countries. I am afraid that the UK does not occupy a good position in this league table.

I will set out four reasons why I believe there is a compelling case for introducing this Bill. First, there is the need for transparency—to be open, up front and honest with motorists, who as taxpayers have been taken for granted for too long. The magnitude of the tax paid every time drivers fill up at the pumps has been hidden from them for decades. UK drivers continue to pay the highest fuel duty in the world for diesel and the fifth highest for petrol. There is a need for transparency, so that the country’s 37 million drivers can see how much they contribute to public services and our economy.

The traditional VAT-only fuel receipts that are given to us at petrol stations, which we invariably file in the glove compartment, must end now and be replaced by open and complete tax information. Every time a driver fills up their vehicle, they will be able to see where their hard-earned cash is going in the Treasury, and in what form—VAT, fuel duty and VAT on duty. When prices at the pumps fell to around £1 per litre in 2016, the tax that the Government took from drivers reached 75%. What other huge tax contribution is kept hidden from those who pay it? I believe that there is an obligation on the Government to be open with UK drivers regarding the taxes they pay. If drivers feel that they are being taken for granted, we are driving down a very dangerous road. There is a need to be completely up front and to show motorists what they are paying.

It is also important to highlight the regressive nature of fuel duty. In particular, it hits hard-working families and those who are just about managing—the JAMs whose challenges have been highlighted recently. We know that 90% of all journeys are by road, and 70% of drivers have no choice but to use their vehicles to get to work, to drive their children to school, to take their elderly parents to hospital or to go out for the day with their families. I see the problem for myself in my Waveney constituency, where wages are below the national average and many people have no choice but to use their cars to get to work, often travelling long distances to places such as Norwich, Ipswich and Felixstowe. There is also a limited number of petrol stations from which to buy fuel. Waveney motorists, like so many in similar areas around the country, are hit hard by this triple whammy.

It is important to highlight the impact that fuel duty has on the economy. Since 2011, the Treasury has listened to the carefully researched and evidence-based FairFuelUK campaign to freeze fuel duty, which has objectively proved that the level of fuel duty directly impacts on the success of the economy, the creation of new jobs, the level of inflation, investment by small and medium-sized businesses and consumer spending.

Mr Deputy Speaker, it is important to highlight the enormous groundswell of support for the measures in the Bill across the country and around the Chamber. The Bill is targeted at the nation’s 37 million drivers and at all our constituents, so that they can see how much they are contributing to the public purse, to our public services and to promoting economic growth. The clandestine fuel tax receipt must end, and it must be replaced by straightforward and complete tax information for all drivers to see every time they fill up their vehicles.

This is a straightforward Bill that will provide straightforward transparency on fuel duty, on what people pay and on where their money goes. It will make the taxation system more honest. It will spark a debate on whether the motorist should continue to be used as the nation’s tax cow and on how their money is spent. Mr Speaker, I have strained your patience, but I hope that the whole House will support the Bill.

The hon. Gentleman has never strained my patience. It is always a pleasure to listen to his mellifluous tones. I noted that, as he made his case, he single-handedly relegated me to the status of Deputy Speaker, for which of course I am extremely grateful.

I apologise for that, Mr Speaker.

Question put and agreed to.


That Peter Aldous, Mr Alistair Carmichael, Mr Angus Brendan MacNeil, Martin Vickers, Danny Kinahan, Charlie Elphicke, Ms Margaret Ritchie, Maria Caulfield, Drew Hendry, Rishi Sunak, Jim Fitzpatrick and James Cartlidge present the Bill.

Peter Aldous accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 24 February, and to be printed (Bill 133).