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Robert Halfon MP: A 2.5p cut in fuel duty would help create thousands of jobs and get the economy growing again

HALFON-robertRobert Halfon is the Member of Parliament for Harlow. Follow him on Twitter.

Regular Conservative Home readers will know that last year, I campaigned successfully along with this blog and many Conservative MPs for the Government to drop the 4p per litre fuel rise that was planned by Labour, and would have hit every family in Britain. George Osborne listened - to his credit - and petrol is now 10p per litre cheaper than it would have been under Labour's plans. This will save an average family £144 this year in filing up the family car.

But we still have problems. Fuel duty is a regressive tax. It hits the poorest Brits twice as hard as the rich, according to the Office for National Statistics, and is crushing small businesses, especially in areas outside big cities, where firms have no real access to public transport. Tim Montgomerie has long argued for a rebalancing of the tax system - the "shock and awe" tax-cuts that are needed to kickstart growth. I believe a cut in fuel duty is an essential part of this plan. That's why we're asking George Osborne to stop the planned 4p fuel duty increase in August.

Today, along with the FairFuelUK campaign and other MPs, I will deliver a new report by the CEBR to 10 Downing Street. The headline figures - which are based on the Treasury's own statistical models - show that a 2.5p cut in fuel duty would quickly create 180,000 jobs, and more than pay for itself with the extra tax revenues that would be generated. At 1pm, Quentin Wilson and I will open a mass lobby of Parliament - the first ever national Fair Fuel day. People and small businesses from across the British Isles will be coming to Parliament, to ask their MP to support lower fuel taxes in this Budget.

The problems that we face are well-known:

UK fuel duty is the highest in Europe

The House of Commons Library now tells us that Britain has the highest diesel price in the entire EU, and among the highest petrol price - primarily, because we have the highest burden of tax. In real terms, adjusted for inflation, motoring fuel has never been this expensive - except for just TWICE in history, during historic crises of supply: the Suez crisis and the OPEC blockade.

High fuel taxes are losing the Treasury money

The House of Commons Library has said that since 2008, consumption of petrol and diesel has fallen every year. Petrol is now so astronomically expensive that it is driving people off the road, and costing the Government money. The Government’s own figures show that between January and June last year, “1.7 billion fewer litres of petrol and diesel were sold compared to the first half of 2008”. The AA believes that this equates to £1 billion pounds in lost revenue for the Treasury.

High fuel taxes are a brake on growth and jobs

The insolvency firm SFP have said that three quarters of transport business failures in the past year have been caused by excessive fuel prices. In 2011, ex-Tesco boss, Sir Terry Leahy, blamed the catastrophic slump in retail sales on the cost of fuel. He said: “I don't think people fully appreciated what an oil shock we've had. Filling up the family car has gone up 70% in two years, causing what was a steady recovery to go sideways.”

Expensive fuel is damaging our society

Let me explain how this hits my constituency. According to the RAC, in most cases Harlow people are spending £1,700 a year just to fill their the family car. This is a tenth of the average Harlow salary. I met a Harlow man called Barry Metcalf recently: he is self-employed, and uses his car to commute to West Ham for work. He now spends nearly £60 a week on fuel, and has seen a 35-40 per cent increase in the last year or so alone. The Government defines “fuel poverty” as spending a tenth of your income on heating bills. But what about spending a tenth of your income just driving to work?

Foreign lorries don't pay enough

Most people have no choice but to fill up their car or van with fuel. They depend on it for their daily existence. British haulage firms are being driven out of business, as they face higher taxes than in Europe. To its credit, the Government has taken some action, as foreign lorry drivers are now charged up to £9 a day to use our roads. But still, foreign drivers – who number one in eight of all those on the roads – have a huge advantage over British drivers as they pay no road tax or other charges. That has to change.


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