Enterprise and Lifelong Learning Committee, 27 Oct 1999

Meeting date: Wednesday, October 27, 1999

Official Report 274KB pdf

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Inquiry Topics

Our final paper deals with future business. Two issues have been raised as potential further inquiry topics. We touched on one during our initial discussion of areas of investigation; the other issue cropped up in correspondence from members.

The Local Government Committee has put rating revaluation on to its agenda. The paper states that there is to be a hearing on 2 November at which evidence will be given by the Federation of Small Businesses, the Confederation of British Industry, the Executive and other organisations.

For information, the Local Government Committee met this morning and confirmed that it will deal with this matter by seeing those witnesses on 2 November. It will then consider whether it needs to hear from other witnesses and decide what steps to take. As the paper indicates, all members of this committee will receive papers for that meeting.

Members may attend that meeting and make contributions, as David Davidson and Helen Eadie have done at this meeting. We will be in dialogue with the Local Government Committee to ensure that members' areas of interest can be pursued in that forum.

The second issue is differential petrol prices. I received correspondence from Annabel Goldie and Allan Wilson following a public meeting in Arran on 27 September at which concern was expressed by representatives of the local community about differential pricing structures for petrol in rural areas. That serious issue was raised as a possible inquiry topic for this committee.

I spoke to Andy Kerr, the convener of the Transport and the Environment Committee, which has agreed five areas of early action, including petrol pricing and rural petrol prices. That committee is working on two areas of inquiry, one of which is an examination of telecommunications and mobile phone masts. I must remember to send that committee a letter that I received yesterday from a constituent about people using mobile phones on trains, although I do not know whether to confess that I am one of the guilty parties.

The second issue that the Transport and the Environment Committee is considering is concessionary transport. It expects to get to differential petrol prices early in the new year. We have to decide whether we want to do anything before that. I am keen for the committee to respect the sensible boundaries between the areas of specialism. However, Andy Kerr assured me that his committee will address the issue at that time and that the same arrangements that the Local Government Committee has put in place for rating revaluation—in terms of taking input from members of this committee—will be put in place by the Transport and the Environment Committee.

The fuel price escalator, tax and duty are important from a transport and environmental perspective. An aspect that we could consider is the differential, or the wholesale discount that the oil companies apply differently in urban and rural areas. That issue arose principally, although not exclusively, in an island community; differential petrol prices raise wider issues in the islands, as distinct from remote, rural or urban areas. If the Transport and the Environment Committee does not propose to do so, we should take on board that aspect of the inquiry and consider in detail, with the petrol companies, the specific issue of pricing policies. We should not duplicate the work of the Transport and the Environment Committee, but it is not clear what it intends to do.

Allan is absolutely right. The escalator is one part of the problem, but the more significant part, which was highlighted by people on Arran—although it applies to other remote communities—is that there is a furtiveness about other elements of pricing. It is unclear whether those elements arise from the oil distributors or from the oil suppliers, or whether they relate partly to transportation costs. At the meeting on Arran, Allan and I were certainly given to understand that an effective and impressive investigation had been initiated by the community there, but that people had hit a wall and could not get answers to specific questions. I agree with Allan. That aspect may be outwith the remit of what the Transport and the Environment Committee proposes.

I want to back up what Annabel and Allan have said. First, predatory pricing, especially against independents, is a problem in the remoter areas. Secondly, the majors are withdrawing contracts from rural petrol stations; that is a big issue in the Highlands and Islands. The stations are being refused new contracts and are being told to find a dealer to supply them with petrol. Thirdly, there is the matter of how margins are calculated. In Bute, we have the ridiculous pricing policy whereby I can buy white diesel for our farm tanks more cheaply than my local garage can purchase it for retail sales.

If pricing is a separate matter that the Transport and the Environment Committee will not consider, we should be the lead committee on it. This is about competitive pricing and the abuse of monopoly powers. Our work would overlap with the Office of Fair Trading south of the border, so perhaps we should speak to it.

The issue of pricing strikes at the heart of the remoter communities' ability to have any enterprise base.

A further issue that I should have raised is the use of Shell and Esso agency cards, which used to be available if the petrol station was contracted to a major. People could use their card to get their petrol at the UK average price. I believe that that facility has been withdrawn in some places.

I sense that members would be enthusiastic about asking questions about the specific issue of petrol pricing and about the points raised by Annabel, George and Allan. I shall ask the clerks to take steps to set that up as soon as it can conveniently be fitted into our work programme. We acknowledged at the outset that we would concentrate on the local economic development inquiry but that we would leave some opportunities to pursue other aspects. I shall keep in close touch with the convener of the Transport and the Environment Committee on the subject.

In view of my past life, convener, may I suggest that representatives of the Petrol Retailers Association, which is under the auspices of the Scottish Motor Trade Association, would be good witnesses? They have raised a lot of the issues that we are talking about and are concerned about margins in transport costs and about differential pricing. An independent witness may not want to stick his neck on the line for this committee, but the Petrol Retailers Association could give a collective view.

I would not dare to challenge Arran united there—[Laughter.] A couple of meetings ago, when I raised the issue of semi-conductor manufacture, we agreed that it would be interesting to consider the fluctuations of that industry.

I have written to the minister on the points that you raised, Duncan, and I await a reply. Once I receive it, I shall circulate copies to all members and we can build it into our future inquiry programme.

Should we wait for the reply? Given that we have been waiting for a couple of months, should not we proceed with identifying the bodies that we would want to invite along or that we would want to visit?

We can certainly bring forward proposals to the committee on that.

The issue of petrol pricing in Arran arose and we have been clear about our desire to extend the discussion to cover all rural areas, so that island communities can all get petrol at the same price.

Semi-conductor production has a major impact on the Scottish economy and fluctuations in price and demand have a consequential effect. We should look at that in a wider context.

I imagine that the Rural Affairs Committee will take a very strong interest in petrol pricing, as the issue affects the economies of rural areas and the travel costs of those who live in them. We have agreed to attend the Local Government Committee and make reciprocal arrangements.

We shall take steps towards holding that inquiry on concerns about differential petrol pricing. We shall also bring forward some other proposals on the semi-conductor inquiry that Duncan McNeil has suggested. An invitation will be extended to members of the Rural Affairs Committee to take part in our discussions on petrol pricing.

I now close the meeting and thank members for their contributions.

Meeting closed at 12:58.