Finance (No. 3) Bill

I rise to speak in favour of the amendment, which states clearly that the Chancellor should publish"““an assessment of the impact of taxation on fuel prices.””" It is a short but, I think, highly important amendment, not least because fuel prices are a key part of our economy and have an impact on inflation. I want to say a few words about why taxation on fuel has a bearing on inflation and why that is at the heart of some of the economic problems that we face today, not just from a dry, technical point of view but from the perspective of families in Wirral, Merseyside and elsewhere who are struggling at the moment. This country has previously dealt with severely high inflation, but for many years we have had relatively low and stable inflation. That is also true across the globe. The nature of the fuel industry means that fuel prices have a specific impact on inflation, but I would point out that inflation in the UK is slightly higher than in the rest of the EU. That should be a warning signal to us. I am not particularly hawkish on inflation and on saying that fuel prices could drive problems in our economy. We need to recognise not the danger of returning to the days of terribly high inflation, but the danger of inflation of nearly 5% when wages are being held down, which limits people's quality of life. People see food and fuel price increases when they go to the shops or fill up their cars—as my hon. Friend the Member for Bristol East (Kerry McCarthy) correctly said, food prices are partly driven by fuel prices—yet their wages are held down, so at the same time, they face higher prices in the shops and less in their pay packets every month. That means a falling quality of life for the average person in this country—[Interruption.] Some in the House clearly think that that is a laughing matter, and I will let my constituents know that they do—[Interruption.] I am very awake to the fact that my constituents are incredibly concerned about their quality of life and what this measure means. They understand that our economy has faced tough times, but they are not beating a path to my surgery to demand exaggerated pay settlements because of fuel and food prices. They are very realistic. However, as politicians, we must ask ourselves whether it is fair to expect people constantly to deal with higher prices in the shops and on petrol station forecourts when the Government are asking for their wages to be held down. That is an issue of fairness, by which I mean that it is not morally right to ask people to accept falling standards of living because of an economic situation that is no fault of theirs. It would have been bad enough for the VAT increase to have occurred when wages are being held down just because of the period of economic cycle. My constituents would have seen their quality of life fall, but one of the biggest worries and fears that I hear of in my surgery every week is the impact of the Government's other policies on people's quality of life. My hon. Friend mentioned some of the impacts from this April. Cuts to the amount that parents can claim for child care will have an impact—they could be worth up to £1,560. That is not small fry. When it comes to making ends meet every week, the Government must think about the long-term plan for ensuring that, by and large, living standards for the average citizen in the country do not fall.