Fuel Duty

I inform the House that I have selected the amendment in the name of the Prime Minister. I call the shadow Secretary of State.

I beg to move,

That this House believes that it is wrong to increase the main fuel duty rates on 1 September, then again on 1 December 2026, with a further increase on 1 March 2027, by a total of five pence per litre, as global oil prices are rising; notes that these increases will affect drivers, farmers, businesses and other hard-working people already struggling with higher taxes and higher cost of living as a result of the Government’s economic policies; and calls on the Government to maintain the five pence per litre cut to the main fuel duty rates introduced by the previous Government beyond September 2026.

Once again, this House has come together to hear of yet another egregious tax on transport, pushed out by this Labour Government at a time when people across the country are worried about the cost of getting around. On this occasion, in their infinite wisdom, the Government have decided that this is the opportune time to cancel the fuel duty freeze that the last Conservative Government kept for 13 years, which protected hard-working people from paying extra to get to work, attend appointments and visit friends and family. The Conservatives cut fuel duty by 5p per litre in 2022—the biggest ever cut in fuel duty—which really helped when the economy was facing headwinds from Russia’s illegal invasion of Ukraine.

Under this Government, though, on top of the countless tax rises that they have already shafted us with, we cannot even get through two years before they decide that the British people need yet another tax rise. It is a tax rise that is being introduced in a sneaky and stealthy way. Labour is deploying its salami tactics—1p in September, the back to school tax; 2p in December, the Christmas shopper tax; and 2p in March, springtime for taxes. We should not forget that a 5p per litre increase in duty is actually a 6p per litre increase, because VAT is added on top of that tax.

In September last year in this Chamber, the Transport Secretary trumpeted that Labour had

“frozen fuel duty—that is what we have done”—[Official Report, 11 September 2025; Vol. 772, c. 1021.]

Yet we know that is simply not the case. It reminds me of my childhood, watching Chris Tarrant on “Who Wants to Be a Millionaire?” saying, “But we don’t want to give you that.” The Transport Secretary has said that tax rises are now coming, not once or twice, but three times: in September, in December, and in March next year. With economic growth at a dismal 0%, the British people deserve better than underhand tactics swindling them out of the pounds in their pockets to pay for more welfare. It is a tax on every car, every van, every motorbike and every bus, and it is also a tax on hauliers, businesses and families—it is a tax on the country as a whole. Thanks to the Transport Secretary’s Government, those families will be forking out an extra £156 a year.

I congratulate the shadow Secretary of State and the Opposition on securing this debate. It is important that we consider this matter, as we are fast approaching a crisis that cannot be circumnavigated. Does the shadow Secretary of State agree that the Government must consider reopening North sea production to produce enough for our needs, if they continue to refuse to play their part in securing fuel elsewhere? Does he not agree that fuel duty would benefit from self-reliance, rather than dependence on volatile nations, as we have at this very moment?

I could not agree more with the hon. Member. We need to get back to drilling in the North sea. Norway is drilling on one side of the same basin and getting the benefit of those jobs and the tax revenue. It bemuses me why we are not doing that here. The shadow Energy Secretary, my right hon. Friend the Member for East Surrey (Claire Coutinho), has consistently said from these Benches that that is exactly what we should get on and do.

My right hon. Friend makes a powerful point about North sea oil and gas extraction. The Labour party says that will not make any difference to the global price of oil and gas, but billions and billions of pounds in tax will be lost as a result of having no new licences in the North sea. Those billions could be used to replace the revenues generated by fuel duty. In fact, if the Government wished, they could convert those billions into cuts in price at the pump for every single family in the country, including those in rural Beverley and Holderness who are suffering today.

My right hon. Friend makes an incredibly important point. The Government are forgoing tax revenue that is going into the coffers of other Treasuries right across Europe and across the world, but why? To what end? We will see whether Ministers will answer why they are willing to forgo hundreds of thousands of jobs and billions of pounds every year. [Interruption.] They could spend that on anything they wanted to, and they are not even going to do it.

Order. Parliamentary Private Secretaries are not there to chirp all the way through and give solutions to a problem. I have great confidence in the Minister’s ability to answer when he comes to speak.

I thank you, Mr Speaker, for reminding the hon. Member for Hitchin (Alistair Strathern) of his role.

Does my right hon. Friend agree that the Government’s policy fails on its own terms, because they say they want to subscribe to net zero and make us much greener in how we approach our energy consumption, yet we know that importing liquefied natural gas from countries such as the US has a carbon cost that is a multiple of extracting the stuff in this country within our own territorial sea? If the Government are serious about net zero, they would therefore be pumping LNG from the North sea, not importing it from the US.

My right hon. Friend makes an incredibly important point, and he makes it clearly. He is in agreement with the Climate Change Committee, which says that we will have to be using oil and gas well in to the second half of this century. Why on earth should we not drill our own at lower cost and bring in those jobs and taxation, while getting the environmental benefits of doing it on our own doorstep under British regulations? It would not be extracted in other countries with lower regulations and lower environmental standards. The best environmental standards in the world exist in our North sea.

Part of this debate is about sustainability and net zero. Colleagues have already made a number of interventions on that, and I understand the shadow Secretary of State’s position. Does he agree that while we are focusing on the hike in fuel duty, the Government are also increasing the charges on electric vehicle drivers? Both sets of drivers are being hammered by this Government, who have not thought through the consequences of their policy.

My hon. Friend makes an interesting point at this juncture. It is clear that the Government are trying to undo the damage they have done with their new tax. They are having to put more money into the electric car grant than they will get out from these pay per mile schemes, which they had previously said they would not introduce. The Government are costing themselves more money by imposing a tax. Whether it is the North sea or taxation policy, what they are up to is incredible. The TaxPayers’ Alliance has said that, after this tax hike, the average driver will pay almost £40,000 in fuel taxes over their lifetime, and it will be a higher proportion of someone’s income if they are in a lower paid job and need a car to get about.

The shadow Secretary of State is talking about how money may be spent from taxation. I highlight that local authority road maintenance budgets halved from £4 billion to £2 billion in the 13-year period from 2006 to 2019. If we look at inflation, Bank of England data shows that from 2006 to 2026, overall inflation ran at 74%, but fuel inflation was just 58%.

Indeed. On the hon. Member’s second point, inflation would have been higher overall if fuel inflation had been higher overall. He makes an important point about potholes and road maintenance. It is interesting that he stood on a manifesto at the last general election that promised to fill an extra million potholes a year. We saw the figures just a few weeks ago showing that exactly the same number of potholes were filled last year as were filled in the last year of the previous Government. I look forward to seeing his Government starting to deliver on any of their pledges. Perhaps they could do so a bit more easily if they had that tax revenue coming in from the North sea, as those on the Opposition Benches would like to see.

This is Labour’s regressive tax raid. Do we expect those on the Government Benches to understand just how punitive this tax measure will be? Of course not. How could they understand, when it is rural communities that will be hit hardest, as it always is with transport? The truth is that the Department for Transport and the Treasury working together is more like watching an episode of “Hustle”. The con is on, and it is being perpetuated by this Labour Government.

Does my right hon. Friend agree that in large rural constituencies such as mine, it is not just about constituents having to pay additional fuel duty at the pump, because they also pay it through everything they buy? Everything has to be transported into these rural areas, and there are services that they require. They therefore pay twice, which makes this tax rise doubly regressive.

My right hon. Friend raises an incredibly important point. It is not just those who have a car who will be paying for this policy—although they will be paying the most—and it is not just those who rely on a van for their business or work to get around who will be paying; everyone will be paying, whether they use the bus or are just going to the shops. The truth is that everything has to be transported by road in this country. This tax rise will have huge inflationary pressures right across the board, not just for fuel, whether for heating or for road transport, but, as he is right to say, for so many other areas—areas that have not even been considered by the Treasury.

All my right hon. Friend’s arguments stand, and that was true before the war in Iran. The Prime Minister stood there on Monday saying that the freeze is still in place, but the world has literally changed around us. Does my right hon. Friend share my concern that this Government are not being reactive and following the change? There will be a big impact and a knock-on effect, and the Prime Minister is touting this policy as though it is new, when it was in the Budget last year.

My hon. Friend makes an important point. He will be aware that when the fuel price goes up, the Government’s VAT revenues from fuel go up at the same time. They are already seeing hundreds of millions of pounds a year extra in VAT, purely from the fact that the underlying price has gone up. My hon. Friend makes another important point, which is that this is a moment for the Government to reconsider. We on the Opposition Benches opposed this measure at the Budget, because we thought hitting working families was the wrong thing to do, but it is doubly the wrong thing to do when prices are also going up internationally.