MPs debate fuel tax cut

By Jon Morgan

15th November 2011

MPs were united in their concerns over the high price of fuel in today’s Commons debate. Despite Conservative and Labour representatives trading accusations over which party was responsible for the current high prices, all Members stressed how bleak the situation is for their constituents.

The main concerns, voiced by multiple MPs, were:

- That high fuel duties have a disproportionate impact in rural areas, where poor public transport links means they particularly suffer
- That all businesses were struggling with the enormous levels of duty on fuel, pushing up prices, affecting employment and delaying economic recovery
- That the high level of tax puts the British haulage industry at a huge disadvantage, as foreign lorries are able to fill up with cheaper fuel abroad
- That oil companies and speculators were profiting from the plight of motorists, and
- That cutting the 50p top rate of income tax should not be considered until fuel prices are reduced

Fuel duty is set to increase by 3p per litre at the start of January and by a further 5p per litre in August. But more than 100 MPs have signed a motion calling on the Government to ease the burden shouldered by beleaguered motorists, who are already paying 80p per litre in fuel taxes.

MPs will debate a motion to lower fuel prices at around 4pm today (15 November) in the House of Commons. The motion was tabled by Conservative MP Robert Halfon after an e-petition signed by more than 100,000 people.

Halfon said: “Most people have no choice but to fill up their car or van with fuel. They depend on it for their daily existence.

“That is why we need a cut in fuel duty for millions of hard-working motorists and families. We must show that tax cuts are for the many, not the few.

“We need no new fuel taxes in this Parliament. The duty rises that are planned for January and August 2012 must be scrapped, and the Government needs to pressure the oil companies to keep prices down.”

But Tory MPs are being told to vote against the motion. A spokesman for David Cameron said: “We recognise motoring is an essential part of everyday life, that lots of families rely on their cars and that fuel is a very significant cost for those families.

“We took some action at the time of the Budget both to get rid of the fuel duty escalator and replace it with a fair fuel stabiliser and cut fuel duty by 1p. When it comes to duty, that’s a matter for the Chancellor. We don’t set out our tax policy outside of the Budget.”

He added that no announcement will be made on the subject until George Osborne’s autumn statement at the end of November. 

The Government is expected to argue that fuel duty has fallen as a total proportion of the cost of fuel – from 80 per cent of the cost of a fill up in 2001-2003 to current levels of 60 per cent.

But AA spokesman Luke Bosdet said: “The Government can argue percentages and proportions, but drivers see straight through them. Comparison of the tax-take in mid-November 2003 now shows that drivers are today paying more in tax on a litre of petrol than eight years ago.”