Member News
By Brian Donohoe MP - 13th September 2011
Brian Donohoe MP says higher fuel prices are "destroying businesses, preventing growth, adding to inflation and affecting all our personal and working lives".
In the first instance, I applied for a Westminster Hall debate on road fuel duties as my postbag is in constant receipt of letters from constituents and local businesses who are struggling with every day costs which involve the consumption of fuel for vehicles. In broader terms, there has been little debate around fuel duties since the Budget. Yet the pressures on families and businesses are increasing as the year progresses. The IFS has announced that living standards of UK families will decline by more than 10 per cent over the next three years, with the steepest drop in household income since 1981.
The debate has stagnated in recent months because the government's strategy has indicated that there is little room to offset falling living standards by cutting taxes. This is simply not the case and I and my colleagues will be arguing that the level of tax and duties on petrol is cutting off the prospects of many struggling families and businesses, destroying the job prospects of young people who rely on public transport to seek work and exasperating the rural urban economic divide.
The rocketing prices of a litre of fuel which have been imposed on this country in recent times are crippling the economy more than ever. Businesses are folding because they just can't afford to run at a loss any longer. Rail fares have shot up by a shocking 10 per cent recently, and increasing food prices have resulted from increased delivery costs to supermarkets. Higher prices are destroying businesses, preventing growth, adding to inflation and affecting all our personal and working lives.
With almost 60 per cent of what we pay at the pump made up of the gvernments' fuel duties, there is no doubt the increase in VAT to 20 per cent only exacerbated the situation. Although the government has frozen fuel duty for the next couple of years, it will pick up and rise with inflation. It is widely expected that the government will catch up their lost time as petrol is always a very easy revenue raiser, leaving the consumer no better off in the long run.
The independent forecourt industry is a significant casualty of high petrol cots. I will be raising the concerns of business leaders, most notably in respect of the two-tier price system operated by hypermarkets and oil companies, leading to the closure of around 400 forecourts a year. This leaves Britain extremely vulnerable should a national emergency arise, notwithstanding the ever increasing rural – urban divide and the shrinking of the rural economy.
We will also need answers from the Treasury on their commitment to a Green Economy, in light of the government's decision to remove the 20p duty differential for biodiesel produced from used cooking oil by April 2012.
I hope we will have some constructive answers from the government on how they plan to address these anxieties and avoid a potential catastrophe with social, economic and environmental consequences.
Brian Donohoe has been a Labour MP since 1992. He currently chairs the PLP Departmental Group for Transport.
Article Comments
With the price hike in rail tickets year on year the only option is to drive to work.
But with the increasing cost of fuel this is becoming more difficult to do and for rural communities with a lack of a local bus network what are commuters supposed to do?
Bernadette
13th Sep 2011 at 12:20 pm
An extremely important issue. Passing my driving test was very expensive and now I can't afford to run a car to get to work. Our american friends across the pond have a much easier ride.
Katy Davies
13th Sep 2011 at 12:03 pm
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