Petrol price rises causing 'real hardship' in rural communities, Tory peer warns

Rocketing petrol prices are causing “real hardship” in rural areas and the Government should cut VAT and fuel duty “as a matter of urgency”, Tory peer Anne McIntosh has argued.

Baroness McIntosh of Pickering said the cost of filling an average family car surpassing £100 is causing “another type of fuel poverty”.

She asked in the House of Lords what assessment the Government has made of the numbers of households in fuel poverty and what steps they are taking to address this.

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Energy Minister Lord Callahan said: “In our latest official projection, there would be an estimated 3.03 million households in England in fuel poverty in 2022, according to the low-income, low-energy efficiency definition.

Petrol prices at Wetherby Services earlier this month.Petrol prices at Wetherby Services earlier this month.
Petrol prices at Wetherby Services earlier this month.

“The Sustainable Warmth strategy, published in February 2021, details our approach to tackling fuel poverty in England. Energy efficiency remains the best way to tackle fuel poverty in the long term, reducing the amount of energy required to heat a home and contributing to lower energy bills and of course, carbon emissions.”

Baroness McIntosh, who is president of the president of National Energy Action group, replied: “The figure used by the NEA is 6.5 million households in fuel poverty.

“Of course, that figure would have been substantially higher had it not been for the generous measures given by the Government in late May of this year.

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“Does my noble friend recognise that there is now another type of fuel poverty, and that is the fact that it is costing £100 to fill the tank of an average family car? In those circumstances, does he accept it is causing real hardship in rural areas, and particularly for carers travelling between their clients?

“Will the Government, as a matter of urgency, reduce the VAT of 20 per cent on fuel and the 57 per cent fuel duty and make sure that is passed on to the forecourts?”

Lord Callahan said Chancellor Rishi Sunak has already recently taken action on fuel duty with a 5p per litre cut and questioned the wisdom of any further cuts.

He said: “I totally understand the points that my noble friend is making, and the Chancellor has, of course, already reduced fuel duty.

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“Domestic fuels, such as gas and electricity, are already subject to the reduced rate of five per cent VAT.

“Going further, I would not guarantee that prices would fall, given that most of the price rises are driven by a number of factors that can be seen worldwide. The other problem is that cutting VAT would also be a tax cut for everyone, including wealthier people in society.”

The Competition and Markets Authority announced on Monday that it will carry out a “short and focused review” of fuel prices after a request by Business Secretary Kwasi Kwarteng.

Mr Kwarteng said drivers are “rightly frustrated” that the 5p per litre cut in fuel duty implemented by the Treasury in March has not stopped prices from soaring.

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The average price of a litre of petrol at UK forecourts reached a new high of 185.4p on Monday, according to data firm Experian.

That is an increase of 6.9p in just a week. The average price of diesel was a record 191.2p per litre on Monday.

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