Member News
By Anne McIntosh MP - 15th February 2011
A fuel duty stabiliser is needed to help rural drivers, says Anne McIntosh MP.
The price of fuel is one of the most pressing issues facing people across the country. Nowhere more so than in rural areas, where large distances are coupled with limited public transport alternatives.
Small businesses, which drive our economy, are particularly suffering. There are 6000 small businesses in my constituency of Thirsk, Malton and Filey alone and their cash flow is being hit at an already hard time.
We will all feel the effect in the price of everyday items as haulage companies when be severely hit. The UK has the second highest diesel price in Europe and is twice the level of some countries where it is significantly cheaper than petrol.
Those living in rural areas are particularly dependent on their cars. The elderly, those on fixed incomes as well as those with young children are even more reliant on their cars for visiting their doctors, seeing their families, and doing their shopping. The recent massive increase in the price of fuel is therefore eating into their household income.
As fuel plays such a crucial part in people’s everyday lives at time when incomes are down and their expenditure is up, I feel we must seriously examine the possible solutions to this problem.
I see there are four options available to us. The first is to do nothing and maintain the status quo, which is not really an option. The second is not to introduce the duty rise on 1st April, which will translate to more than 4p at the pump.
The third is to look at introducing a fuel duty stabiliser which would mean that when oil prices increase, the stabiliser would allow the government to reduce duty to a lower limit.
This is perhaps necessary as oil prices are not likely to fall, and if duty continues to rise, it will put vehicle running costs beyond many individuals and businesses. I do understand the difficulties involved in knowing whether fluctuations in the price of oil are temporary or are likely to persist and the current oil price would need to be compared against the long term trends.
Importantly, we must consider the cost to the Treasury of any changes, especially at a time of record deficit in the public finances. When this policy was first devised, the oil prices were well below $100 per barrel.
I welcomed the prime minister's statement, in response to my prime ministers question, that the government are looking at whether it is possible to introduce a Fair Fuel Stabiliser.
A fourth option would be the introduction of a rebate for remote rural areas. I welcome the Coalition's commitment to investigate measures to help with fuel costs in remote rural areas, where vehicles are a necessity, not a luxury. A rebate would follow the model of the government’s pilot scheme, where a maximum of 5 pence per litre of duty is discounted on petrol and diesel.
I feel ‘remote areas’ should include North Yorkshire which in transport terms is very remote and where large distances are covered for essential, every day journeys.
Going forward, if the current trend of duty increases on top of rising oil prices is both unfair and unsustainable for many businesses and individuals alike. The budget in March will be a great opportunity to spell out the measures which the government will be taking.
Anne McIntosh was elected a Conservative MP in 1997 and has represented Thirsk and Malton, Yorkshire and Humberside since 2010.
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