Fuel Duty

Oral Answers to Questions — Treasury – in the House of Commons at 11:30 am on 5th November 2013.

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Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys 11:30 am, 5th November 2013

What assessment he has made of the effect of freezing fuel duty on the price of petrol.

Photo of George Osborne George Osborne The Chancellor of the Exchequer

Thanks to this Government’s action, pump prices are 13p a litre lower than they would have been under the previous Government’s plans. Provided we can find the savings to pay for it, my intention is to freeze fuel duty for the rest of this Parliament.

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

I thank my right hon. Friend for that reply. The cost of fuel is of great concern to many of my constituents. If he can freeze the price of fuel for the remainder of this Parliament, how much cheaper will petrol be, come the next election?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

If we are able to freeze petrol prices for the rest of this Parliament, the price will 20p a litre lower than it would have been if we had stuck with the plans that the shadow Chancellor advocated at the last general election. That would mean, as my hon. Friend the Economic Secretary was just reminding us, a saving of over £10 every time people filled up their average car. That is what this Government are doing; by fixing the public finances, we are able to help people.

Photo of John Mann John Mann Labour, Bassetlaw

When the Chancellor became Chancellor, unleaded petrol was £1.19 a litre. Can he tell us how much it is today?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

It depends, of course, where you buy it. The last price I saw at a petrol station was around £1.35, but it would have been 20p higher if we had stuck with the last Government’s plans—the hon. Gentleman voted for them—in the last Labour Budget. That is the truth, and it is because we are fixing the public finances and fixing the economy that we can avoid these disastrous Labour tax rises.

Photo of Andrew Tyrie Andrew Tyrie Chair, Treasury Sub-Committee, Chair, Treasury Committee, Chair, Treasury Committee

The freeze on duty makes a crucial contribution to improving business competitiveness, and will have been welcomed by all our constituents throughout the country. Will the Chancellor undertake, as part of his work on the autumn statement, to publish the Treasury’s own estimate of the full amount by which both motoring and energy input costs have been increased by climate change-related measures?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

Of course, the OBR provides an assessment of the impact of Government policies on the economy, and I will consider my hon. Friend’s specific suggestion that we look into the impact of climate change policies on energy prices. We are currently examining the charges and levies that the last Government, among others, added to energy bills, and seeing what we can do to roll them back in order to provide relief for customers.

Photo of Nigel Dodds Nigel Dodds Shadow Spokesperson (Justice), Shadow Spokesperson (Foreign and Commonwealth Affairs), DUP Westminster Leader

I welcome the action taken by the Government to freeze fuel duties, but UK taxes on petrol and other fuels remain among the highest in any country in the European Union. What will the Chancellor do to remedy that much-unwanted achievement?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

I looked at the plans that this Government inherited, and then cut petrol duty in March 2011. We have frozen the duty ever since, and I intend to continue the freeze for the rest of the current Parliament, provided that we can find the savings to pay for it. That is the crucial point: if we do not sort out the economy, if we are not fixing the public finances, if we do not have an economic plan, we cannot have a living standards plan.

Photo of Robert Halfon Robert Halfon Conservative, Harlow

Notwithstanding the excellent news of the fuel freeze, petrol pump prices are still under threat from hard-liners at Grangemouth. Does my right hon. Friend agree that extremism in the pursuit of hard-pressed motorists is no virtue?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

My hon. Friend is absolutely right. The greatest threat to fuel supplies recently has been the threat of industrial action from the Unite union, led by the chair of the Falkirk Labour party. We now hear the former Labour Chancellor and the former Labour Foreign Secretary saying that Labour should open its inquiry and publish what it finds, and a Labour Front Bencher saying that Labour does not “publish internal documents”.

Photo of Chris Leslie Chris Leslie Shadow Chief Secretary to the Treasury

I shall return to the actual question of duties. Has the Chancellor found the £750 million that is needed to pay for the freeze? At the party conferences, he also promised to spend a further £700 million on school meals, a further £300 million on his Work programme, and a further £600 million on a marriage allowance. That is £2.3 billion of promises. Let us be clear about this. Is the Chancellor going to raise taxes or cut services to pay for those promises, or is he planning simply to borrow even more? Which is it?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

What a question from a Labour Front Bench team that wants to spend £27 billion more, and to borrow every penny of it. If this is the hon. Gentleman’s debut performance as shadow Chief Secretary, I am afraid that he will have to do a lot better. His job should be to control the promises that he makes. As for our side, we are paying for the commitments that we are making to the hard-working people of this country.

Photo of George Osborne George Osborne The Chancellor of the Exchequer

I will tell the right hon. Gentleman how: by sorting out the mess that he created.

Photo of Chris Leslie Chris Leslie Shadow Chief Secretary to the Treasury

Despite all that hot air, it seems that there are still £2.3 billion of unfunded promises. Would it not be far easier if all those promises were fully costed and funded and independently checked by the Office for Budget Responsibility, just to ensure that the Chancellor’s sums add up?

We have proposed that all the main political parties should be able to submit tax and spending plans to the OBR ahead of the election manifestos. Surely we can all agree that—as the Chair of the Treasury Committee has suggested—an independent audit by the OBR for all the main political parties would be good for the democratic process, so will the Chancellor now join us in a cross-party consensus on that?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

As to a cross-party consensus, I remember when I was speaking from the Opposition Dispatch Box and the hon. Gentleman’s party was in government that it opposed the creation of the OBR—opposed it time and again. I believe it is important that we preserve the independence and integrity of this new body, which is working well but is entrusted with the very important task of providing the economic forecasts for whoever is in government. That should be its primary purpose and the changes to the primary law that the hon. Gentleman is proposing are not very practical.