Fuel Prices
The final item of business today is a members’ business debate on motion S4M-01340, in the name of Stuart McMillan, on commending petrol and diesel watch.
Motion debated,
That the Parliament commends the Greenock Telegraph’s Petrol and Diesel Watch feature, which advises motorists on a daily basis of the fuel prices at filling stations throughout Inverclyde and the west of Scotland; acknowledges that this was established in response to public outcry at rising fuel prices and also reported disparities of as much as 7p per litre between filling stations in nearby towns, and is concerned that dramatically rising fuel prices threaten to exacerbate an already challenging economic situation for households and business operations in Inverclyde, the west of Scotland and across the country as a whole.
17:04
I thank all the members who signed the motion, including Murdo Fraser, without whom the debate would not be taking place, as he was the first and only member from the Opposition parties to sign the motion.
I congratulate the Greenock Telegraph on its campaign to highlight the inequality of petrol and diesel pricing that every vehicle driver in Inverclyde is facing. It is important to state that the Tele—the shortened name for the newspaper—did not launch the campaign because it wants petrol and diesel to be cheaper in Inverclyde than anywhere else, but because it believes that there is inequality in the pricing of petrol and diesel in Inverclyde and in nearby towns.
This week, the newspaper is reporting that the average price of unleaded petrol is 132.9p a litre, and that the average price of diesel is 141.9p. It uses a couple of petrol stations outside Inverclyde to make daily comparisons, and the prices at those stations are regularly lower than those in Inverclyde. I know people who have stopped putting fuel in their cars in Inverclyde because they know that, if they buy it elsewhere, it will be that bit cheaper. That has a knock-on effect on the local Inverclyde economy, because those people purchase other products and services outside the area.
In previous correspondence with companies that supply fuel, they have responded that they are pricing the fuel to be competitive in the local market. In studying economics, we are always told that competition works to reduce prices, and that if there are more suppliers, there is a better chance of the customer getting a better deal. I accept that theory, but it is not working for motorists in Inverclyde. Competition in fuel pricing does not appear to be working.
I can understand when members who represent rural communities highlight the high price of fuel in their constituencies. I contacted some of my colleagues this week to ask for examples of fuel prices in their areas. Mike MacKenzie responded, telling me that a petrol station on the Isle of Coll is charging £1.71 for a litre of unleaded petrol, and £1.72 for a litre of diesel. I fully appreciate that the price of fuel in Inverclyde and other parts of West Scotland is not as high as it is in the Western Isles, Orkney, Shetland and parts of the Highlands. There remains an issue, however, with regard to the inequality of the prices.
The Greenock Telegraph online reported on 22 July that fuel was 7p a litre cheaper in Ayr than in Inverclyde. I congratulate the people of Ayr on getting their fuel 7p a litre cheaper—well done to them—but that highlights yet again how flimsy the local-competition argument actually is. Within the past week, I have purchased fuel from two garages outwith Inverclyde. The first occasion was at Tesco in Helensburgh last Friday, and the second was at the Esso garage in Paisley yesterday, when I was on my way to Parliament. I noticed that the diesel in the Esso garage was 5p a litre cheaper than in Inverclyde, and that petrol was 3p a litre cheaper.
Any purely economic explanation of those irregularities falls down. Scotland is an oil-rich nation, yet Scots are now paying among the highest fuel prices in Europe, and more than ever before. Rising oil prices are putting extra revenue into the United Kingdom Treasury. It is bad enough that Scotland does not see the benefit of its rich natural resources, but we also lack a structure to ensure fairness in relation to fuel duty. It is high time that some of the money that the Treasury rakes in was used to bring down and stabilise fuel prices in Scotland. This situation, more than anything, underlines the need for the fuel duty regulator for which the people of Scotland and the Scottish National Party have long campaigned.
Last week, during our debate on the Chancellor of the Exchequer’s autumn statement, I mentioned the delay in introducing the 3p per litre increase that had been due in January. I welcomed the chancellor’s decision not to introduce the increase, and I do so again today. However, he has delayed it only until next August, so I encourage him not to introduce it then, either. Murdo Fraser also touched on that in his contribution to the debate last week. The 3p increase would be a retrograde step, whether it was done in January or August. We know that the economic conditions are not great and, in the light of today’s announcement of the latest unemployment statistics, I hope that the chancellor will realise that high fuel prices play a part in such figures.
Inverclyde faces particular challenges. In an environment in which there is high unemployment, people can ill afford increased fuel bills, especially when the bills could hinder their trade or their route back into work. This morning’s announcement highlighted that there are 3,500 unemployed people in Inverclyde. That just goes to show the economic challenges that the area faces.
Although the SNP Government is working to lower bills through the council tax freeze, the small business bonus scheme and the abolition of prescription charges, as well as trying to create opportunities to stimulate the economy and creating modern apprenticeships, Inverclyde motorists feel as if they are being ripped off at the fuel pump. There are knock-on effects on the wider Inverclyde economy.
I appreciate the member’s giving way.
What is Stuart McMillan’s view on the role of the major supermarkets, such as Tesco and Sainsbury? In many cases, they have a UK-wide policy on consistent petrol prices. Volume is a major factor that relates to pricing. The member mentioned economic rules. I would be interested to hear his views on those two factors.
The information that I have received on various supermarkets the length and breadth of Scotland, in rural and urban communities, suggests that there are variations in the prices that they charge. I do not fully comprehend their reasoning around having similar prices throughout the country.
I am conscious of the time, so I will conclude. In the absence of any action from Westminster to introduce a fuel duty regulator, I want those powers to be devolved to this Parliament. Ultimately, the people of Inverclyde are really fed up of feeling as if they are being ripped off when it comes to fuel. The great Inverclyde petrol rip-off has sickened many people from the area, who have decided to buy their fuel elsewhere. Something needs to be done about it.
I warmly welcome the Greenock Telegraph’s campaign for fair fuel prices. It is an excellent initiative and the newspaper deserves to be commended for it whole-heartedly. The people who work on the newspaper understand the harsh economic reality that Inverclyde’s motorists are facing, as well as the wider economic challenges. I hope that the newspaper keeps the campaign going. I know that that service is warmly welcomed by everyone in Inverclyde.
17:12
I welcome the opportunity to speak in the debate, which opens up two significant issues for my community, one positive and the other negative.
Could I ask you to move your microphone closer to you, Mr McNeil?
Okay. I will not repeat the first bit—I am sure that it is on the record.
The first issue is the positive role of local newspapers in campaigning on issues that are important to their readership in the wider community. I have been involved in successful campaigns with the Greenock Telegraph over 30 years. In recent years, I have worked with it to save our accident and emergency services, our local football team and even the hospital tea bar. I am sure that many members will have similar experiences. It was great to be able to repay the favour to the newspaper industry, particularly the Greenock Telegraph, in a debate almost two years ago, in January 2010, when the Scottish Government was threatening to withdraw public notice advertising from newspapers, which is vital to sustaining local newspapers through difficult times.
I note that Stuart McMillan also took part in that debate, when he extolled the virtues of new media in Inverclyde and described the different perspective that they provide as “refreshing”, compared with that provided by the local newspaper. He also told the chamber that day that quite a few people tell him that
“they are sceptical about their local papers”.—[Official Report, 28 January 2010; c 23215.]
I wonder who he was referring to.
Could you discuss the petrol and diesel issue?
Yes.
Thank you.
I will discuss that. I think that the motion refers to the role of the newspaper’s campaign. In the course of my contribution, I will mention that, too.
I welcome Stuart McMillan’s conversion to the cause of local newspapers and his belated recognition of the good work of the Greenock Telegraph, which is mentioned in the motion. Sadly, he has not always been able to support recent campaigns. He will remember the Tele’s award-winning campaign against knife crime, which supported John Muir’s call for tough action—a campaign that came within just two votes in the chamber of bringing about a change in the law. It was a very successful campaign, which received an award. He will also remember the campaign earlier this year against the cuts to Inverclyde’s regeneration budget. Our community demanded its fair share from the SNP Government, only for that money to be diverted to other parts of the country. That campaign continues.
That leads me to the current campaign on fuel prices. Every motorist has cause to grumble about the price at the pumps, but we in Inverclyde have particular grounds to be unhappy because, as the Tele’s petrol and diesel watch highlights, we are consistently asked to pay higher prices than our near neighbours. The lack of competition in Inverclyde is at the heart of the matter. The two large Tesco shops and one Morrisons store keep prices high and, in effect, fund a price war in other parts of Scotland that enjoy greater competition. I have repeatedly made representations to the supermarkets involved—Tesco and Morrisons, for the avoidance of doubt—and have spoken and written to the Competition Commission, regrettably without success.
I have also raised the issue of anti-competitive planning law with the Scottish Government. The minister will be aware that planning law can restrict new applications for supermarkets coming into an area such as Inverclyde. Tesco and Morrisons value that protection, but it is time that we asked whether, given that they are using their dominance to inflate fuel prices, they deserve it.
The minister has an opportunity to review planning legislation that would make the supermarkets sit up and address loyal consumers who repeatedly complain about the price that they pay to fund price wars in other areas. The prize for Inverclyde could be a reduction of 5p a litre on average. I ask the Scottish Government to consider reviewing planning legislation that supports such practices.
17:17
I commend Stuart McMillan for his motion and congratulate him on securing the debate. As members might be aware, I am not a regular subscriber to the Greenock Telegraph. However, I was interested to see the campaign that it is running, which sounds extremely worth while in the local context.
I will spend my time talking about some of the broader issues that are highlighted in the motion, such as the impact of “dramatically rising fuel prices” on the economy. The assumption in the motion is that rising fuel prices are bad. I agree with that, but that assumption is not shared by everybody. There is no representative of the Green party present, but I suspect that, if there were, they would take quite the opposite view and state that rising fuel prices are a good thing because they dissuade people from using their cars and move them on to public transport. Therefore, we should not accept as a given that everybody thinks that rising fuel prices are bad.
That general approach drove previous Westminster Governments to introduce the fuel tax escalator to increase the cost of fuel year on year and help to bring about modal shift away from private transport to public transport. However, times have changed, as the cost of fuel has gone up dramatically not simply because of taxation but because of the underlying cost of a barrel of oil.
I remember—as will other members—that, when the price of a litre of unleaded fuel was reaching £1 some years ago, people thought that there would be riots in the streets. It is now, I think, around £1.30 for a litre of unleaded fuel—at least, that is what I paid when I filled up yesterday—so costs continue to rise.
The motion rightly points out that there is an impact on individuals and businesses. All individuals pay more when they fill up their cars and all businesses pay more because the goods that we buy in the shops must be brought in. The haulage industry plays a vital role in that, but 1p on the cost of a litre of fuel puts many pennies, if not pounds, on the cost of the goods that we buy in the shops and contributes to inflation.
As Stuart McMillan fairly said, there is a great impact on rural communities in particular, including some of the ones that I represent. The option to move to a public transport alternative does not exist there to the same extent as might be the case in an urban community.
Stuart McMillan was gracious enough to acknowledge some of the steps that the chancellor has taken to reduce the impact of increased fuel duty. It was announced in the budget earlier this year that the proposed increase would be scrapped. Indeed, fuel duty was decreased by 1p at that time, and the 3p increase that is proposed for January has been deferred until August. The result of that is that by January, fuel will cost 10p a litre less than it would have had the previous Labour Government been re-elected. That is welcome, although I accept that there is more to do. Those steps will also be welcomed by motorists and businesses across the country.
There is always a balance to be struck. Those measures reduce the revenue coming in to the Government at a time when the Government is desperately in need of revenue to balance the books. The Government used the budget to introduce an increase in the tax on oil and gas to fund the reduction in fuel, and that led to loud calls from the oil and gas industry about the deterrent effect that that increase would have on future exploration. I have to say that there is little sign of the increase having deterred future investment, but it goes to show that there are never any easy options. If we reduce the price of fuel, we have to find the money from somewhere to fund that. Whoever has to pay the extra money will not like it.
My congratulations to Stuart McMillan, and I thank him for giving us the opportunity to discuss these important issues.
17:21
I add my congratulations to Stuart McMillan on securing the debate. In my constituency, and throughout the Highlands and Islands, the issue of high fuel prices has long been contentious. Although the Greenock Telegraph feature that is mentioned in Stuart McMillan’s motion serves to highlight price discrepancies between filling stations, the issue in the Highlands is not so much that retailers are profiteering but that Westminster is cashing in by taking too much tax from the motorist and that fuel prices in rural areas are higher than they are in towns and cities.
Recognising that, Lib Dem MP Danny Alexander based much of his 2010 re-election campaign on promises to take action on the issue. Of course, his re-election was successful and he is now chief secretary to the Treasury with power to act and nowhere to hide, unlike his Lib Dem colleagues in the Scottish Parliament who are all hiding tonight—there is not a single one of them in the chamber—unless of course Murdo Fraser is a proxy Lib Dem for the coalition parties. I see from the horrified look on his face that he is not.
Danny Alexander tried to implement a little bit of his promise and, this autumn, after months of delays and excuses, island motorists heard that next year they will see a small reduction in the price of their fuel.
Although any reduction in the cost of fuel is welcome in areas in which the use of a car is essential, I am afraid that the impact of the 5p cut in the limited geographical area in which it has been delivered has only made the price a little bit less exorbitant. It is still much higher than the price that we see in other parts of the country. In Skye, the 5p off is welcome, but it must be balanced against growing public anger throughout mainland Highland that the Lib Dems have failed to deliver on their main pledge to have cheaper petrol in rural areas, which persuaded so many to trust them with their votes.
Earlier this year, I was contacted by several independent filling stations on the west Highland mainland who feared that cut-price competition on Skye would fatally undermine their business. For instance, today, at 140.9p per litre, there is no difference between the price of petrol at the pumps in Broadford on Skye and at pumps in Inverinate, which is just 20 miles away on the mainland. Diesel is actually a penny cheaper in Broadford. With the fuel discount, the difference would be 5p for petrol and 6p for diesel, with the mainland filling stations being disadvantaged.
In October, I wrote to Mr Alexander to make the case for applying the discount to all disadvantaged rural areas. Sadly, that commonsense approach appears to have been beyond him, as he rejected my call. My letter to him suggested a two-stage roll-out of a rural petrol discount programme, to be applied initially to the west Highlands, to tackle the issue of uneven competition that is feared by those petrol retailers close to the fuel discount area, and then to all rural areas.
However, that would need to be supplemented by implementation of the SNP’s long-standing policy to have a fuel duty regulator for all areas, which would reduce the Government’s tax take from fuel sales as prices rose, to allow the maintenance of stable prices at the pumps.
Given that Scotland is the European Union’s largest oil producer, it is surely not too much to expect our citizens at least to have stability in the cost of their fuel, even if they pay a higher price for petrol than people in almost the entire continent.
The newspaper feature that is referred to in Stuart McMillan’s motion sounds like an example of the reliable information that is needed to enable the fuel market to operate efficiently, and it should help to equalise prices in the Inverclyde area. I congratulate those involved on that.
17:26
I thank Stuart McMillan for bringing an important subject to the chamber, and I welcome the terms of the motion. I also welcome the action that the Greenock Telegraph has taken to highlight the variations in fuel prices across Inverclyde, and its provision of a daily snapshot of prices.
In preparing for the debate, I asked to see some of the relevant articles from the Greenock Telegraph because, like Mr Fraser, I confess that it is not the first journal that I choose in my daily perusal of the newspapers.
I commend the active and persistent journalism on the part of all of those who have taken part in the campaign. Their provision of information to their readers is a salutary example, which other local newspapers could well emulate. Some, of course, do. Paul Coulter, Susan Lochrie and David Goodwin—I apologise if I omitted anyone—are to be praised. I do not wake up in the morning expecting to praise many journalists in the course of the day, but I recognise the persistence with which they have pursued the matter.
An article that appeared in the paper on 22 July 2010 states:
“Every day from today we will publish an updated list of the fuel prices at every petrol station across Inverclyde. That way our readers can decide where to fill their tanks—and at what price. The reason behind our new Petrol Watch feature is we receive countless letters and emails from local drivers who say they are fed up at having to pay higher prices than areas nearby.”
Setting aside the politics of the issue, we can all recognise that such journalism, which involves the simple, straightforward reporting of facts and the provision to readers in the area of readily understandable information, is extremely helpful and informs them about where they can get the best deal. More than that, it constitutes a form of pressure on the companies involved—which, according to the motion, charge up to 7p more than others—to reduce the excess charges that lead to the disparity, through fear of public exposure and being named and shamed.
Inverclyde is not the only area of the country where that happens. The Strathspey and Badenoch Herald—if I may be permitted to mention that august organ—has exposed the disparity in the prices that are charged in petrol stations in Aviemore, Grantown and elsewhere, some of which are in my constituency while others are in that of Dave Thompson.
I put on record my appreciation to the Greenock Telegraph for the work that it does, and I acknowledge Mr McNeil’s comments, even if they ranged freely and widely—that is what we would expect from an old hand—in recognising the newspaper’s campaigning efforts in other areas. I have met Mr Muir on several occasions. I have debated with him and I respect him, as Duncan McNeil knows. These are serious matters and it is right that a local newspaper should take up the cudgel on behalf of its readers. That is perhaps the main thrust of the debate.
Mr McMillan’s motion refers to the
“challenging economic situation for households and business operations in Inverclyde”,
which I think permits me to claim that relevant to the debate is the work that the Scottish Government is doing through the council tax freeze, the abolition of prescription charges and the small business bonus scheme, which have helped to alleviate the burden that many individuals and businesses face in their daily lives. I think that Mr Thompson alluded to the matter.
Does the minister—
Can we have Duncan McNeil’s microphone on, please? [Interruption.] Mr McNeil, I think that you will need to take your card out of the console and reinsert it.
I give up. I am sure that the minister could hear me clearly, though.
I could probably hear Mr McNeil if he was in Our Dynamic Earth. I am sorry that I did not have the opportunity to take his intervention; I would have been happy to respond.
Taxation accounts for around 60 per cent of the price that we pay at the pumps—the highest rate in any EU country. The taxes are set by the UK Government and it is clear that the UK Government possesses the levers to address the issue. It is also clear that 80p is collected through fuel duty and VAT on each litre of petrol that is sold—that is 14p more per litre than was being collected just three years ago. Of course, under current plans, fuel duty is due to rise by a further 3p per litre next August. It is evident that the overall tax burden on petrol and diesel is still increasing. That is unfair on Scotland, given that we are incredibly oil rich—I think that this year we contributed in the region of £13 billion to the London Exchequer from our overall oil and gas taxation.
I acknowledge the comments that members have made and I will try to be reasonably consensual. The cost of fuel is a burden on ordinary families and individuals, especially households on lower pay and households that have no access to public transport, some of which need two cars so that the husband and wife can travel to and from home.
I will try again. Will the minister give way?
Do I have the pleasure of hearing from Duncan McNeil now?
I thank the minister. He has commended the campaign, but representations to the Competition Commission and to supermarkets—who are turning away the representations of loyal customers—have had no success. Is there a possibility that the minister and the Scottish Government can aid consumers who are in the situation that he described, by reviewing the planning laws that supermarkets value and suggesting that competition issues will be dealt with and other supermarkets encouraged to come into areas, which would reduce consumer prices?
I never say never, but I am not aware of a provision in planning law that would allow that to be done. If Mr McNeil can suggest an approach that we can take, we will be happy to consider it.
Taxation on fuel remains the main component of the cost, and the power rests with Westminster in that regard. I wish that the Scottish Parliament had the power to handle matters. If it did, I think that members of all parties would strive with every effort that we could muster to provide a better deal, especially for people on lower incomes and people who live in rural and island communities, who have suffered injustice for far too long.
Meeting closed at 17:34.