---

Finance Bill

I thought I had covered that earlier. If we use duty or tax—a price mechanism—as a disincentive for car use, that is a managed increase. I am referring to the prolonged spiking—the unexpected increases for which businesses in particular cannot plan—over and above the normal increases in duty that may or may not be applied as an incentive to reduce vehicle use. I hope that helps. As I said, the AA, using its own estimates on unleaded petrol, indicated that some six months ago the price of a litre was about 80p. This month it is about 86p. If our road fuel regulator were in place now, that would trigger a cut in fuel duty of 1.2p, which would be paid for by the increased take in VAT over the past six months. It would take away some of the pain—some of the spike—for consumers and road hauliers at no real cost to the Treasury, as the revenue that it gained was unexpected in the first instance. Such a move would have lowered pump prices from the near-record highs that we see today and moderated them at the level that existed around mid-April. As the AA Motoring Trust pointed out, the price reduction would put just under £1 million a day back into the pockets of consumers, into the bottom line of businesses and presumably into the tills of the shops and other small businesses on which many of our communities depend and on which the Chancellor depends for his tax take. I shall quote further from the AA. Because of the 6p increase that it estimates over the past six months,"““individual motorists have seen the monthly cost of petrol for a typical privately owned car rise from £87.43 in January to £94.02 in May. In households with two cars this represents a £13.18 hit on family expenditure each month””—" that is, over and above anything that one would have expected. That is not good news for the small businesses in all our constituencies or for the Government, who rely on our collective spending power to keep their economy going. The second element of the road fuel regulator would ensure that freezes on fuel duty are not left to the whim of the Chancellor, but are instead automatically triggered by world oil prices which are in excess of a forecast that we would have the Chancellor make in each Budget.