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Mr. Maude: If increases were wrong then, how much more so are they now. The escalator was introduced--I said this earlier, and the Chief Secretary did not contest it--at a time when Britain had about the lowest priced fuel in the European Union. Now, however, our fuel prices are the highest by a large margin. If the hon. Gentleman was right to oppose what was done then, I assume that he will vote with us against the Government's stunning 12 per cent. increase on DERV and the increase on petrol.
Mr. Campbell-Savours: The right hon. Gentleman has twice said that Britain under the Conservatives had the lowest priced fuel in the European Union. Can he name
one country in which the price charged for diesel was higher when the Conservatives were in power? France? Italy? Germany? Belgium? Holland? Spain? Can he name just one?
Mr. Maude: My understanding is that we had about the lowest price. Certainly, the then Chancellor believed that--[Interruption.]--and I hear confirmation from my hon. Friends.
Mr. Campbell-Savours: The right hon. Gentleman is wrong.
Mr. Maude: The hon. Gentleman is not helping his case. If we already had more expensive fuel then, the case for opposing the Government now is even stronger. He is building ever higher the case against the wretched clause 2, which is doing such damage. For all the arrogant insouciance of the Chief Secretary, the Government should acknowledge that they are crippling the competitiveness of the road haulage industry. The tax increases have gone beyond any environmental justification. They should accept our view that the annual road fuel escalator should be scrapped. Conservatives will vote against the road fuel duty increases, and we urge the Government to abolish the escalator.
Yvette Cooper (Pontefract and Castleford): Given that the right hon. Gentleman opposes the fuel escalator that he once supported, and given that he claims to support the extra £40 billion for health and education, which he previously described as reckless and irresponsible, how does he make his sums add up? If the fuel escalator were abolished, where would he find the extra money for health and education?
Mr. Maude: We expect a little more from the hon. Lady than that she should tamely read out junk mail from Labour party headquarters. Last July, in responding to the Chancellor's spending plans, I said--[Interruption.] The Chief Secretary is becoming very excitable, but I hope that, in view of what I said last night, and 10 months ago, he will refrain in future from--I must find a parliamentary way to express this--the deliberate distortion of our position. Last July, I said:
- "The Chancellor hopes that we will oppose his plans to spend more money on health and education, but I am going to disappoint him. Let there be no doubt that we welcome extra money for those priority services."--[Official Report, 14 July 1998; Vol. 316, c. 196.]
The Chairman: I call Yvette Cooper.
Mr. Maude: I shall give way to the hon. Lady if she is prepared to withdraw what she said earlier and commit--
The Chairman: Order. We are in danger of confusion. Despite my calling the hon. Lady, I do not think that the right hon. Gentleman has given way. I call Mr. Maude.
4.30 pm
Mr. Maude: I will cheerfully give way, with the qualification that the hon. Lady should withdraw what she said and commit herself to refraining from deliberate distortions and smears.
Yvette Cooper: Does the right hon. Gentleman deny that he told the House of Commons that the comprehensive spending review, which involved £40 billion extra spending on health and education was "reckless" and "irresponsible"?
Mr. Maude: The hon. Lady should know better than that. Yes, I said that the overall spending settlement was reckless and irresponsible, and that is because it breaches the Prime Minister's solemn general election pledge to cut the social security bill. Will she tell the Committee that he never said that? The comprehensive spending review involves an increase in social security bills equivalent to the extra spending that we support on health and education put together. How is the extra £37 billion on social security consistent with the solemn pledge to cut social security bills?
Yvette Cooper: Does the right hon. Gentleman agree that the previous Government increased social security spending rapidly and that cutting social security bills is exactly what has allowed the Government to put extra money into pensions and child benefit? Given his concentration on the social security budget, what exactly does he want to cut--child benefit, pensions, or what?
Mr. Maude: The best advice to the hon. Lady is, "When you are in a hole, stop digging." The lesson that she should learn from this is that she is okay with the first handout from Millbank tower, but beyond that she gets into serious difficulty. It was not the Conservative party, but Labour, that made a solemn general election pledge to cut social security bills. She should ask the Prime Minister what he plans to cut in the social security budget. It is his failure to cut it that makes the total spending plans irresponsible.
When we introduced the fuel escalator in the previous Parliament, petrol and diesel prices in Britain were among the cheapest in Europe. Labour increased the escalator by a fifth, and brought forward the increases from November to March.
Mr. Paterson:
According to evidence given to me by Brian Yeardley--the only haulier mentioned in the famous KPMG report--in 1994 only Luxembourg and Spain had cheaper diesel than the United Kingdom.
Mr. Maude:
I am grateful to my hon. Friend.
Mr. Tony McNulty (Harrow, East):
The right hon. Gentleman said that it was the cheapest.
Mr. Maude:
The record will show that I said, "around the cheapest". The disclosure that there are two countries with cheaper fuel bears that out.
From the basis introduced by the previous Government, Labour has increased the escalator by a fifth and brought forward the increases from November to March. Petrol and diesel prices in this country are now the highest
in Europe. It is time to get off the escalator. The Conservatives realise that, when one gets to the top of an escalator, it is sensible to get off. We recognised the problems that ever-rising duty was causing to our drinks industry, so we acted to deal with them. In our last two Budgets, my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) froze duty on beer and wine and cut it on spirits. He recognised that we could not continue remorselessly loading burden on burden for ever. The Government face a much worse problem that has been imposed on the road haulage industry and the motorist by the road fuel tax. Their policies are doing real damage, but Ministers' only response has been to insult the hard-working people in the haulage industry, do nothing and hope that the problems will go away. Well, they will not.
Mr. Shaun Woodward (Witney):
I wonder whether my right hon. Friend has in mind family businesses such as Betts and Co. in my constituency, which started in 1929, runs about four vehicles and has a turnover of £500,000 a year. Last year, despite that very good turnover, it made a profit of only about £15,000. This year, as a consequence of the increases that the Government are introducing, it is projected to lose about £5,000. The firm is far too small to think about moving abroad. It is suffering because of the increase in fuel duties. I am sorry that the Chief Secretary refused to take an intervention from me earlier on this matter. Does my right hon. Friend agree that the Government are deaf to such companies and that this sort of thing could undoubtedly put such companies out of business?
Mr. Maude:
My hon. Friend makes the point strongly. It is precisely that sort of case that has led the Freight Transport Association to call the rise in fuel prices "crackpot, cock-eyed and ridiculous". The Road Haulage Association claims that the British trucking industry
Another hon. Member said:
One of my hon. Friends mentioned earlier the story in the newspapers at the weekend, which must have been placed by Treasury sources to try to head off the concern that is mounting day by day. It is headed "Brown in U-turn on petrol duty". It says:
"is being forced into exile by penal increases in taxation."
The CBI has weighed in as well. As we know, it is not an organisation particularly prone to criticising the Government. It says:
"The CBI believes this policy is placing British business at a disadvantage."
No doubt it is ignorant, useless and uncompetitive in the eyes of the Chief Secretary. It says:
"For some, bankruptcy may be unavoidable, while others may find it necessary to travel the extra miles to fill up outside the UK, or relocate altogether,"--
is this fantasy from the CBI as well?--
"to the detriment of local filling stations and local economies. The costs for those based in regions such as Scotland and Wales,"--
perhaps of particular interest just at the moment to the Chief Secretary and his colleagues--
"who have less opportunity to take advantage of the cheaper diesel available on the Continent and who have further to go to reach Continental markets, could also rise disproportionately. . . . Either the road fuel duty escalator should be halted, or its impact on the commercial freight sector should be mitigated."
No doubt that is all nonsense as well--another lot of hopeless people who are getting it all wrong. The fact is that the Government are failing to listen even to people on their side, including the hon. Member for Workington (Mr. Campbell-Savours).
"Countless local road hauliers have talked to me about the road fuel duty . . . I know that many of them have real problems. the problems are not confined to road hauliers; large swathes of manufacturing industry are beginning to be hit by the tax . . . Common sense says that we must take our foot off the escalator at some time".--[Official Report, 20 April 1999; Vol. 329, c. 764.]
That was the hon. Member for Dudley, South (Mr. Pearson) in this Chamber last week. He is right. If only more Labour Members had the courage to speak out in defence of some of the poorest people in their constituencies, who find petrol prices are now spiralling out of their reach, and firms that face being literally priced out of business.
"Ministerial sources said yesterday that the fuel duty escalator was likely to be phased out or dropped in next year's Budget."
It will be interesting to hear from the Chief Secretary whether that is a correct bit of briefing or just another decoy to detract attention from the mess that the Government have made of this policy and the damage that they are inflicting day by day. The Chief Secretary smiles in a merry way, but plenty of his constituents are suffering as a result of the escalator. I hope that he will confirm that the Government will take the advice that they have been given, by not just the Conservative party, but plenty of people outside the House of Commons, that it is time now to call a halt to the road fuel escalator.
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