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Fuel Duty

I notice that later in the debate, when talking about the suggestion that the hon. Member for Dundee, East (Stewart Hosie) had made to deal with the price rises, the hon. Lady said:"““I must say that it is not one that I agree with.””––[Official Report, Finance Public Bill Committee, 15 May 2008; c. 236.]" I look forward later in today's debate to hearing her explain quite why the technicalities of the hon. Gentleman's proposals were not workable, but that her own proposals are. I come now to the workability, or practicality, of the proposals of the hon. Member for Runnymede and Weybridge (Mr. Hammond). The Opposition say that if their proposals had operated since the Budget, fuel duty would be 5p lower today. Their proposal is effectively for a 1p change in duty for every $6 change in the price of a barrel of oil. That would certainly keep Her Majesty's Revenue and Customs, and the industry, busy. Over a quarter of a year, we have seen not simply a $6 variation in the price of oil, but a $60 variation. On 6 June, oil prices rose by $10 in a single day. Yesterday they fell by $10 in the space of several hours, ending the day $6 down. Under the hon. Gentleman's proposals, therefore, fuel duty would have gone up by 1p yesterday alone. If fuel duty changed every time oil prices varied by more than $6 from the Budget forecast, rates would have changed more than 25 times just since the Budget 18 weeks ago: down on 18 March, up again on 19 March; down on 26 March, up again on 31 March; down on 2 April, down on 9 and 18 April. In one week in May, duty would have changed four times in a week: up, down, up, down. This is not a fuel duty stabiliser; this is a fuel duty yo-yo. Oil prices are now not only high, they are very volatile, and right now some of that volatility is absorbed by the private sector, as it does not reflect every change in the price at the pump, but that would not be the case under the hon. Gentleman's plans. Under his proposals the Government and the taxpayer, rather than the industry, would take the risk and pay the price of smoothing the figures on the forecourts. Ever-changing rates would cause complexity for oil producers and tax collectors, and be confusing.