Fuel Blockade

Part of the debate – in the House of Lords at 3:48 pm on 28th September 2000.

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Photo of Lord Brabazon of Tara Lord Brabazon of Tara Crossbench 3:48 pm, 28th September 2000

My Lords, we were glad that the protest finished when it did and we hope that there is not a repeat in 60 days' time, as threatened. However, that does not alter the fact that we have a great deal of sympathy for those who were involved in the protest: people who genuinely believe that their livelihoods are at stake because of the enormous increase in the cost of fuel duty and petrol.

I remind the House that we on this side have been calling for action on fuel duty for many months, if not years, and we voted against the increase in the last Budget. No doubt I shall be reminded that it was the Conservative government who introduced the fuel duty escalator in the first place. However, that was at a time when the price of crude oil was very much lower than it is now. The thing about escalators is that one gets off when one gets to the top.

Since this Government came into office, they have increased the average cost of unleaded petrol from 59p a litre to its current price of over 80p. Sixteen pence of the 26p increase in petrol has been due to increased taxation and fuel duty. Britain has the second cheapest pre-tax petrol in the European Union, behind only Germany. However, once tax is added on, Britain leaps to the top of the price league table and fuel is 23 per cent more expensive than the European Union average. Can we really be proud that we have the most expensive fuel in the whole of Europe, probably the most expensive in the world?

As I said, when we introduced the fuel tax escalator United Kingdom petrol was the third cheapest in Europe. The present Government increased the escalator to 6 per cent in June 1997. They held three Budgets in their first 21 months and increased petrol by at least 6 per cent above inflation each time, that is, three annual increases in less than two years. It does not stop there. In the 1999 Budget they increased diesel by 12 per cent, which had a devastating effect on hauliers.

Even in this year's Budget, although the Government stopped the fuel duty escalator, they put up the price of petrol by 3.3 per cent, which was allegedly what the rate of inflation was going to be in September 2000. I do not want to embarrass the Minister by mentioning pensions, but it was in the same Budget that a 1.1 per cent increase in the rate of inflation for increasing pensions resulted in the well-known figure of 75 pence, which does not now even buy a litre of petrol.

Under this Government the average motorist is paying around £350 more per year for petrol. In the spring of 1997 it cost £37 to fill a Ford Mondeo; now it costs £52. As I said, we have consistently opposed these fuel tax rises. We urged the Chancellor to end the annual increases in fuel duty two years before he finally claimed that he would stop the fuel tax escalator. We have pledged that we will cut fuel tax by at least 3p per litre when we return to office. That can easily be afforded.

Can the Minister say what is the current estimate for North Sea revenues? It was £4.3 billion at the time of the Budget, with oil at 22 dollars. What is it now with oil at around 30 dollars? It is estimated, according to National Audit Office figures, that the Treasury receives £330 million extra revenue a year for every one dollar rise in world oil prices due to higher VAT, petroleum revenue tax, North Sea royalties and corporation tax. So the time has come when we need to see a reduction in fuel duty.

These protests were not just about the price of fuel for hauliers and farmers. They were also about the extra regulations and red tape that the Government have piled on to small businesses. It is no wonder that the protestors had, according to the opinion polls, the support of some 90 per cent of the population.

I ask the Minister a couple of questions about the list of priority filling stations--those for essential services-- which he mentioned in his Statement. Is it true that the list was inaccurate at the time it was posted on the website and that some of the sites did not actually exist and had not been petrol stations for quite some time? I hope the noble Lord can give the House an assurance that the list is being brought up to date.

Secondly, are the emergency regulations to which the Minister referred still in force or would they have to be reintroduced if another emergency arose?

As I said at the beginning, it is to be hoped that such a situation will not arise again, but it is now up to the Government to take action on fuel duty.