Fuel Duty Freeze

Oral Answers to Questions — Treasury – in the House of Commons on 21st May 2019.

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Photo of Daniel Zeichner Daniel Zeichner Labour, Cambridge

What assessment the Government have made of the environmental effect of freezing fuel duty since 2010.

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

The price of fuel has only a marginal effect on how much fuel people purchase. That means that fuel duty freezes have a limited effect on emissions. Fuel costs, however, are a major expenditure for both households and businesses, which is why this Government have chosen to freeze fuel duty for nine successive years.

Photo of Daniel Zeichner Daniel Zeichner Labour, Cambridge

That is not the view of most people who actually know about these things. This Government have gone from climate emergency to climate complacency in just three weeks. There is 4% extra traffic on the roads because of the scrapping of the fuel duty escalator. What fiscal mechanisms is the Treasury contemplating to deal with climate change?

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

I take it from the hon. Gentleman that he supports increasing fuel duty. He asks who has that opinion. Actually, most economists agree that fuel consumption is highly price-inelastic, because working people do not always have the choice to use public transport or cycle. Not everybody lives in a city like Cambridge, with excellent public transport. We support the working men and women of this country, particularly in towns and rural areas, and we have saved them £1,000 a year on their fuel bills.

Photo of Kirstene Hair Kirstene Hair Conservative, Angus

I declare my role as vice-chair of the all-party group for fair fuel. As the Minister outlines, it is the Conservative party that has frozen fuel for nine consecutive years. Since 2010, my constituents and people across the country have saved £1,000. As he mentions, the Opposition parties suggest that that was an ill-judged decision. Does he agree with me that it is this Government and this party who are on the side of motorists and hard-working people?

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

Absolutely. This Government will always support working people. We want to raise living standards. We are particularly conscious of those men and women who work in parts of the country, like the area my hon. Friend represents, where it is not easy to get to work. They need that extra money in their pockets to get on, do their jobs and run their businesses.

Several hon. Members:

rose—

Photo of Barry Sheerman Barry Sheerman Labour/Co-operative, Huddersfield

That was a very, very complacent answer to a very important question. Is it not a fact that the house is on fire? We want a radical tax like the one Mrs Thatcher introduced with Geoffrey Howe in 1981. Why do we not have a tax on banks, Amazon and all the other people making profits, and put the money into fighting climate change now, when the house is on fire?

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

We on the Government Benches are not complacent about climate change; we are leading the world in this area. We are decarbonising faster than any other G20 country and we are investing billions of pounds in this area. If we want to tackle the challenge of decarbonisation, we will need to gather the greatest amount of private investment and innovation from the private sector. We will never be able to do that by going around nationalising industries below market value and making bellicose statements that shareholders are lining their pockets. The shareholders are the savers, the pensioners and the international investors that this country needs to thrive.

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

May I urge the Minister to reject the representations from the Labour party for a £9 billion tax rise on hard-working motorists? Does he not agree that rather than sandbagging hard-working people, it would be better to invest in more electric charging infrastructure to give people a real choice?

Photo of Robert Jenrick Robert Jenrick The Exchequer Secretary

My hon. Friend is absolutely right and that is what the Government are doing: investing in ultra-low emission vehicles; increasing the capital allowances budget, now extended to 2023, for EV charge points; announcing a £400 million fund to get private sector investment in getting those charge points rolled out across the country; and, through the plug-in car grant, giving generous subsidies to help people to buy their first electric vehicle.