Steve Speaks Out Over Fuel Duty & Petrol Prices

(November 18, 2011)

Steve & Liver Building 

FUEL duty must be cut when the price of petrol rises, Liverpool MP Steve Walton will demand today.

Steve Rotheram, Labour MP for Walton, will call on Chancellor George Osborne to revive plans for a “price stabilisation mechanism”, to prevent motorists being ripped off at the pumps.

The policy – floated by the Conservatives in opposition, but apparently dropped last year – would see the Government cut duty when the cost of oil soars, to prevent price “spikes” at the forecourt.

More than 100 MPs have signed a Commons motion being debated today. The majority are Conservatives, including Graham Evans (Weaver Vale) and Stephen Mosley (City of Chester).

However, a call for planned fuel duty hikes worth 4p – scheduled for January and August next year – to be scrapped has been dropped.

Mr Rotheram said it was not a surprise that he was backing a motion tabled by a Conservative, saying: “I look at every motion on its own merits.”

And he added: “The people I represent in Walton argue that the price of petrol only ever seems to go in one direction. So, when the oil price goes, the price goes up at the pump. But, when the price-per-barrel goes down, the price of petrol does not fall in proportion with that. It is a big issue.” The debate follows a 1p-a-litre cut in fuel duty, announced at the Budget last March, when Mr Osborne also scrapped a planned hike that would have added 4-5p at the forecourt.

Mr Osborne also unveiled a “fair fuel stabiliser” to keep costs down in future. Above-inflation duty hikes would only go-ahead if oil prices – and pump prices – plunge. However, the idea fell far short of an earlier Conservative plan to adjust the level of duty in line with fluctuations in oil prices, to spare motorists the pain of sudden hikes.

Today’s debate has been triggered by an “e-petition” that collected 100,000 signatures, which called on the Government to “scrap the planned 4p fuel duty increases, which are scheduled for January and August, 2012”. The dropping of that key demand has made life easier for ministers. As a consequence, Tory MPs will not be “whipped” to vote against the motion.

It also argues that revenues from fuel duty have dropped by £1bn in the first six months of this year, compared with 2008 – suggesting the Treasury is losing out because the petrol price is so high.

However, there were suggestions last night that Labour would table an amendment to the motion, calling for a VAT cut on fuel worth 3p-a-litre.

One Labour backbencher described the motion as “wishy-washy”, arguing Tory backbenchers had been leant on “not to rock the boat”.

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