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As we look back on the 20th century, we see that the motor car has been the most liberating influence of our time. As my hon. Friend the Member for Macclesfield (Mr. Winterton) said, it has freed millions to lead their lives as they choose. That freedom is now under attack. The cost of motoring is overtaking the costs of housing and food as the single most expensive item of expenditure in the household budget.
The windfall from the rising price of crude oil will be substantial. The House of Commons Library has been advised by the Inland Revenue that a 30 per cent. increase in the world oil price to $29 a barrel would raise North sea revenues by around £1.7 billion in a full year--a point made by my right hon. Friend the Member for Wokingham.
The Government's handling of the fuel crisis was lamentable. They were taken by surprise. As my hon. Friend the Member for Macclesfield said in his excellent speech, the Government were out of touch. They were not listening to our road hauliers and farmers, whose livelihoods were being destroyed, nor to hard-pressed businesses and families hit by Labour stealth taxes. The Government did not listen to the nurse going to her night duty, to the mother picking up her children from school, or to the pensioner nipping down to the shops. For all those people, the car is a part of their lives.
The Government did not listen to a nation that said, "Enough is enough." During the crisis, it took them four days to find out what was going on. The pumps in Sedgefield were closed. My mother-in-law was seen walking down London's Cromwell road with an empty fuel can, but it was not until the luvvies of Islington could not get to the delicatessen to buy their sun-dried tomatoes that the Government knew that they had a crisis on their hands.
Asked why he thought there was widespread discontent, the Prime Minister said, "Well, I hear the occasional story of that." He should get out more. He said, "Leave it to me. In 24 hours, everything will be back to normal." However, the next day things were even worse.
The Conservative party has long argued for lower taxes in general, and for lower taxes on petrol and diesel in particular. We support the Confederation of British Industry's call for a cut in fuel tax. If we were in government now, we would not be cutting fuel duty--we would not need to, as we would never have got into this position in the first place.
The Conservative party has consistently believed that fuel taxes should be lower, and we have voted against the increases in fuel duty. Between now and the next election, the Chancellor has the opportunity to reduce taxes. If he can, he should; if he will not, we will.
The Financial Secretary to the Treasury (Mr. Stephen Timms): It is worth reminding the Opposition of a few basic facts. The previous Conservative Government introduced the fuel duty escalator in 1993 at 3 per cent. but raised it to 5 per cent. in the same year. Figures published with their last Budget showed that the escalator would carry on.
The hon. Member for Croydon, South (Mr. Ottaway) said that the Conservative party argues for lower taxes. That may be true, but it does not deliver them when in government. The previous Conservative Government solemnly pledged that there would be no tax increases, but then they introduced 22 Tory tax rises--the largest number ever. That is the record of the Conservative party, and people have not forgotten it.
However, the right hon. Member for Kensington and Chelsea (Mr. Portillo), the shadow Chancellor, yesterday told a House of Lords Select Committee that he would scrap the independence of the Bank of England in setting interest rates if he thought that it was being incompetent. Frankly, when one compares what happened when the shadow Chancellor was Chief Secretary to the Treasury with the record over the past three and a half years of the Monetary Policy Committee that this Government established, there is little doubt about whose judgment
We have had to make some tough choices over the past three and a half years. Those tough choices have delivered unprecedented economic stability, benefiting all parts of the United Kingdom. We have put public finances back on track. We have converted a £27 billion deficit at the time of the election into a £16 billion debt repayment last year.
The results are clear: last week's unemployment figures were down to levels that we have not seen since the 1970s. By reducing debt and cutting unemployment, we can allocate money that under the Conservatives would have gone to debt charges and unemployment benefits to better public services instead--schools, hospitals, transport. That has happened not despite the decisions that we have made on taxation but because of them. That means no irresponsible lurches on tax policy and no reckless moves to jeopardise this vital new stability in the economy, which is so important for the future of all of us.
We entirely understand the concern over high fuel prices which has been expressed in recent weeks. We are listening to road hauliers, petroleum retailers, motoring organisations and members of the public. I particularly take the points made about those in rural areas. We have been listening carefully to them.
Let us look at the record on the haulage industry, to which a number of hon. Members have rightly drawn attention, including the right hon. Member for Wokingham (Mr. Redwood). Let us see how the haulage sector fared under the previous Government. Let us compare the most recent year--1999-2000--with 1992-93, when the shadow Chancellor, the right hon. Member for Kensington and Chelsea, became Chief Secretary to the Treasury. In that year, bankruptcies in road transport ran at nearly twice the current level. Company liquidations were more than twice the current level. The figures were more than last year's level in every year while the right hon. Gentleman was at the Treasury. That was the price that the road transport industry paid for Tory boom and bust--twice the pain of today. Of course, it was not only the haulage industry that suffered but the entire economy. No, there will be no going back to Tory boom and bust.
As well as their success in managing the economy, the Government have also been right to use the tax system for environmental objectives, in the way described by my right hon. Friend the Minister for the Environment at the start of the debate. We have provided duty cuts for cleaner fuels and lower vehicle excise duty for cleaner cars. We
To answer the point made by the hon. Member for Macclesfield (Mr. Winterton), we have a low rate of duty for road fuel gases. This morning I met promoters of bio-diesel. We are interested in fuel cells and other developments as well.
The overall increases in fuel duties in recent years have played an important role too. They have given clear incentives to design more fuel-efficient vehicles, limit unnecessary journeys and consider alternatives to the car. Those have played a significant part in putting us on track to meet our Kyoto commitments. Real-terms increases in fuel duties between 1996 and 1999 will produce savings of between 1 and 2.5 million tonnes of carbon a year by 2010. That is a substantial contribution to achieving our climate change objectives, and a contribution that I believe all Members will welcome.
Fuel prices have risen since the Budget, as they have in the rest of the world in response to the actions of OPEC and to demand and supply in the global oil markets. The right response is to address the source of the increase, which is OPEC. That is why the Government have been taking international action to help persuade OPEC to increase the supply of oil and to take steps to bring down its price. We look forward to an enhanced dialogue between oil producers and consumers at the international energy forum next month in Riyadh. We welcome OPEC's recent production increases, and we want it to deliver existing commitments to increase output again and to take additional measures if prices remain unsustainably high.
Rural communities are typically more dependent on the car, as my hon. Friend the Member for Shrewsbury and Atcham (Mr. Marsden) said. That is one of the reasons we have reduced VED on small cars. For many people, a car is a necessity, but even in rural areas many people are without a car. There can be acute travel problems for those in rural areas seeking work, young people, elderly people and those with a disability if they do not have access to a car. That is why we are so committed to supporting public transport in rural areas. That is why the 10-year investment programme in transport is so important in both rural and urban areas.
Let me say a little more about haulage. We are committed to a strong and successful road haulage industry. We have been listening carefully to hauliers and other businesses over recent weeks to ensure that we understand fully the pressures that they face. I have taken part in a number of those discussions, and three things are very clear. First, the way in which fuel prices affect haulage firms varies according to their circumstances. Some firms can pass on higher costs but others simply cannot. Secondly, the competitive pressures affecting the industry depend only in part on the level of fuel prices. There is some evidence of overcapacity in parts of the industry, as my hon. Friend the Member for Denton and Reddish (Mr. Bennett) pointed out. However, there is also a shortage of trained drivers, the industry's most valuable asset.