HC Deb 30 October 1997 vol 299 cc1010-1
2. Mr. Stunell

In which year since 1967 the total tax per litre of petrol represented the highest proportion of average male earnings, and in which year the lowest; and if he will make a statement. [12649]

The Financial Secretary to the Treasury (Dawn Primarolo)

Tax per litre of petrol as a proportion of average male earnings was highest in the period that the hon. Gentleman asks about—1967—although it is currently higher than it has been at any point since 1982 and it is rising due to the commitment on the fuel duty escalator.

Mr. Stunell

Does the Minister agree that the figures give scope for turning the projected green Budget this autumn into a genuinely green Budget through the reduction of VAT on insulation materials and a compensating change in fuel tax? That would be fiscally neutral and would environmentally help the Prime Minister to reach the target that he has set for the reduction of carbon emissions.

Dawn Primarolo

I should remind the hon. Gentleman that the commitments on the fuel duty escalator will by 2010 bring in another £2.5 million towards our CO2 target for reducing emissions. His party should make up its mind about where it stands on fuel duty. One minute the Liberal Democrats tell us that they are against rises because they say that such rises damage rural communities, and the next minute they tell us to put them up even higher to save the environment. Which one is it?

Mr. Green

What is the cost to the ambulance service and the police service of the Chancellor's Budget decision to put a 1p higher rate of increase on petrol duty and to advance its date? The Financial Secretary will be aware that that is causing severe difficulties for important public services and adding to the resource problems caused by the Budget.

Dawn Primarolo

The hon. Gentleman should be congratulating us on giving an extra £300 million to the health service this year and £1.1 billion next year, which will adequately cope with its expenses.

Mr. William Ross

While the intention to have a green Budget may be laudable, those who live in the greenest parts of the United Kingdom—the rural areas—have great difficulty in meeting the constantly rising costs of fuel. What do the Government intend to do about that large group of people for whom cars are a necessity?

Dawn Primarolo

I remind the hon. Gentleman that the Government cut VAT on fuel precisely to assist people to keep warm. In assessing future taxes in connection with the environment, the Government must be sure that they are contributing to the CO2 reduction target. Irrespective of where people live they are not excluded from involvement in reaching that target.

Mr. Swinney

Since the Budget was announced in July, has the Minister given any further consideration to developing differential pricing for petrol as between rural and urban communities, and in some way using the duty to influence that proposal?

Dawn Primarolo

Is that yet another policy? The answer to the hon. Gentleman's question is no.