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Fuel Duty

Volume 646: debated on Tuesday 11 September 2018

To support British households, the Government have frozen fuel duty for eight successive years. By April 2019, these freezes will have saved the average car driver £850 compared with the pre-2010 escalator, and the average van driver over £2,100, but it is important that we remember the other side of this coin. The fuel duty freezes since 2011 have meant that the Exchequer has forgone around £46 billion in revenues through to 2018-19, and a further £38 billion will be forgone over the Budget forecast period, as a result of these previously announced freezes. For context, that is about twice as much as we spend on all NHS nurses and doctors each year.

A Treasury study in 2014 said that freezing fuel duty benefits the economy to offset almost all the loss of tax to the economy, and it said that GDP would increase by £4.5 to £7.5 billion over the forthcoming years. Given the rise in petrol by 13p and diesel by 15p over the past year, does he agree with his own Treasury report that maintaining the fuel duty freeze would benefit the economy and help hard-working people in our country?

The analysis that my right hon. Friend refers to is from 2014, and obviously that analysis would have to be looked at again in the context of the economy today. I do understand that the way the rise in oil prices has had feed-through to the pump represents a real pressure for motorists, and we will take it into account.

The Chancellor will know that the freeze on fuel duty is only a sticking plaster and cannot go on forever. One way of cutting down on emissions is electric cars, but in my constituency there is not a single electric car charging point. Will he commit to investing in more electric charging points across the country?

I don’t know about forever, but it has gone on for eight years, as I have just explained to the House. The hon. Gentleman is right: the car fleet has to electrify if we are going to meet our carbon emissions targets. We set up a £400 million fund in the last Budget to support the roll-out of electric charging infrastructure, which is clearly critical for us to meet those targets.

One of the other major impacts on the wages of the lowest-paid is a national living wage. Does my right hon. Friend agree that it is our reforms as a Government that have boosted the incomes of the lowest-paid significantly?

Of course. We have sought, despite the very difficult fiscal circumstances, to address drivers of cost for households, for example by freezing fuel duty and alcohol duty. On the other side of the equation, we have reduced the tax that people are paying on their wages and raised the earning of those on the lowest wages by introducing and then increasing the national living wage.

Despite the freeze in fuel duty, diesel is currently at £1.33 a litre. Rural communities in particular are finding it very difficult. Will the Chancellor indicate the help he can give to rural communities that are dependent on their vehicles to get to work and have a life?

Many people are dependent on vehicles for everyday living and for work. As I have already said, we understand the pressure that higher oil prices and their feed-through to the pumps presents for individual consumers. We take all such matters into account when setting future policy.

I hope the House will join me in welcoming the hon. Member for East Dunbartonshire (Jo Swinson) back from her maternity leave.