Only a few days to go: We’re raising £25,000 to keep TheyWorkForYou running and make sure people across the UK can hold their elected representatives to account.

Donate to our crowdfunder

[Un-allotted Half Day] — Fuel Costs

Part of Opposition Day – in the House of Commons at 7:15 pm on 7th February 2011.

Alert me about debates like this

Photo of David Gauke David Gauke The Exchequer Secretary 7:15 pm, 7th February 2011

I will turn to the stabiliser in a moment. My hon. Friend has touched on a point that my hon. Friend David Morris and my hon. and learned Friend Stephen Phillips also raised, which is the deficit that we face. It is only by coming up with a credible plan to balance the books that we have managed to create the confidence needed for a recovery. To get there, we have had to make some tough decisions, such as raising certain taxes, including VAT, and cutting public expenditure in the teeth of opposition from the Labour party to all our plans.

One of the few things that we inherited that would reduce the deficit were the previous Government's plans to increase fuel duty. We heard quite a lot from the Opposition spokesperson, Kerry McCarthy, about VAT. It is worth pointing out that the Labour Budgets of 2009 and 2010 involved the following increases in fuel duty: in September 2009, there was a 2p increase; in 2010, there was a 2.76p increase; and there are 1p increases in 2011, 2012, 2013 and 2014. In total, the increase is about 9p a litre. We cannot dismiss those increases without knowing how we can fund any shortfall.

As the Prime Minister said over the weekend, we

"would love to see tax reductions...but when you're borrowing 11% of your GDP, it's not possible."

So although I sympathise with the points made by hon. Members from all parts of the House, our decisions on tax must be viewed in that context, where every penny we increase fuel duty by raises an additional £500 million and if we cut fuel duty, that money will have to come from somewhere else.