Cost of Living Increases — House of Commons, 2022-03-16
Topic: Energy
Neil Quentin Gordon Parish (Conservative, Centre-right): What happened with renewable energy, especially solar and wind, is that the price came down and we achieved a great deal of solar and wind energy without having to pump as much public money into it. That is very much a good thing and I commend the Government for what they are doing. The last Labour Government did nothing on nuclear power. The major nuclear power station at Hinkley Point, with two very big reactors, will produce 8% of our national need. That is the sort of thing that will solve our energy crisis and, in the long run, bring prices down. I also want tidal power at Swansea Bay and Bridgewater Bay to be reconsidered. I believe we are missing a trick there. We can produce very good energy from the second-highest rising tide in the world, so let us get going We have to recognise that at the moment energy prices are governed by oil and gas. What I would say to Her Majesty’s loyal Opposition, as they wax lyrical about having a windfall tax on oil companies, is that we need our oil companies, including those off Scotland, to produce more oil and gas. Who is making the murderous intervention in Ukraine? It is the Putin regime. What does the Putin regime rely on? It relies on the money from energy from both oil and gas. Therefore, it is time for us to produce as much oil and gas as we can. I very much support renewables and the environment, but we have to wake up to the fact that we need to pump oil and gas out of the ground. Putting a windfall tax on those companies would reduce their ability to invest. I urge the Chancellor to look at taxing those companies more if they do not invest, and less if they do. Let us get that going I want energy costs to come down. The increase in the cost of energy, both gas and oil, for my constituents has been huge. I have a meat wholesaler in Axminster whose energy bills have gone up from £90,000 to over £300,000, so it is not just individuals who are affected, but businesses. That means the cost of food goes up. It all has a knock-on effect on the cost of living for all our constituents. Many of my rural constituents have to buy heating oil. One constituent has been given a price of 186p per litre. However much the price of crude oil has gone up, there is no justification for such prices. We need to look not only at the tax on fuel, but at what individual companies are doing and whether they can justify such huge increases in the price of fuel. The Chancellor could also look at VAT on heating fuel: it is only 5%, but if the price doubles from £1 to £2 per litre, that will mean 10p in VAT, so getting some of that back would help at least I turn to fuel duty. Petrol hit a new high of 163p on Monday, with diesel at a record 173p. The RAC says that filling a family car’s 55-litre tank with petrol now costs more than £90 for the first time. Fuel duty is set at 58p per litre for petrol and diesel; VAT is 20%, which means 35p per litre of diesel and 33p per litre of petrol. The Chancellor will therefore have some leeway in his statement. There is no doubt that fuel and diesel costs hit everybody in this country, but they hit the rural population hardest, because the distances we travel to go to work or carry food around are all much greater. I very much support what the Chancellor and other Conservative Chancellors have done to keep duty down, but these are extraordinary times. None of us thought that we would see fuel rising to nearly £2 per litre Let me move on briefly to issues with the costs of farming and the costs to farmers. Some farmers have reported paying as much as 120p per litre for red diesel, compared with 73p a fortnight ago. I do not think that that 65% rise is justified, so please can we look at it very carefully? White diesel—derv—has risen by only 15% in the same timeframe. At 47p per litre, duty is lower for red than white diesel, while VAT is lower at 5%, so surely there is a case to be made that some suppliers are profiteering Nitrate fertiliser is now more than £1,000 a tonne, compared with £647 in January this year and £245 in January 2021, and the cost of urea, phosphate and potash is going up, so I hope that the Chancellor can see ways of helping food production. One of the issues in the terrible situation in Ukraine is that it is very much the breadbasket of the world, especially for the export of wheat. Wheat prices in this country are now at some £300 a tonne. To poultry and pig farmers, feed is an enormous cost, so those price rises will add to the cost of living and we will need to take them very seriously in the forthcoming Budget I commend the Government for their work to help those who are struggling to pay their bills. The cost of living crisis—and it is a cost of living crisis—is the one thing that hon. Members on both sides of the House know we need to face up to, and I believe that the Government are facing up to it. I look forward to the Minister’s winding-up speech.