Fuel Prices
As I understand it, Liberal Democrat MPs voted against that latest announcement by Alistair Darling. We can exchange views on voting intentions. I will come to the Tories’ voting record in just a minute.
When one considers that the average wage and household income in many remote rural and island areas is lower than it is elsewhere in the United Kingdom, the claim for a fairer deal on fuel duty becomes compelling. It is that claim that demands a response from this Parliament and a collective commitment from us to make the case and continue making the case at UK and European Union levels—wherever—until a satisfactory outcome is achieved. I recognise that the SNP’s favoured option is for a fuel regulator. As I said in last year’s debate, my concern about that option is that it fails to address the premium that is paid by people who live and work in remote rural communities. That was acknowledged by the minister’s colleague, Stewart Hosie, who has also accepted that the regulator would keep prices artificially high at times, such as we witnessed last year, when the price of oil falls back. I know that that concerns my constituents and I dare say that it concerns many who are represented by others.
I do not oppose the minister’s amendment as it asks merely that the option of a fuel regulator be looked at. It would be strange if, having urged Parliament to unite to make progress on the issue as a matter of urgency, I insisted on ruling out consideration of any potential solution, albeit in the context of the need to introduce measures as quickly as possible. That could even extend to the fuel price stabiliser, wheeled out proudly, if not entirely convincingly, by the Tories. Their proposal seems to suffer from the same shortcomings that I identified in relation to the SNP’s regulator, with the added complication that it asks us to pin our hopes on George Osborne’s being able to guesstimate an appropriate base rate for fuel—an heroic assumption, most would agree.
In last April’s debate, Alex Johnstone admitted that there were “significant similarities” between his party’s approach and that of the SNP. He went on to say in that debate:
“When fuel costs are high, it is natural that they should be even higher in remote areas”.—[Official Report, 30 April 2009; c 16930.]
Although that statement struck a rather discordant note at the time, I accept that Alex Johnstone qualified his remarks and that he did not seek to justify the disparity between the cost of fuel in rural and urban areas by comparing it with the mark-up paid by drinkers in central London for a pint of beer. Rather unadvisedly, former Labour Treasury minister John Healey tried that approach several years ago in response to a Liberal Democrat amendment to the Finance Bill that sought to introduce a rural fuel discount scheme. Not satisfied with joining forces with Labour MPs to defeat that amendment, not just in that year but on each occasion it has been tabled, Tory MPs now appear intent on deploying some of the worst possible arguments used by Labour ministers to resist such a scheme.
The next item of business is a debate on motion S3M-6142, in the name of Liam McArthur, on fuel prices.
10:29
If proceedings go to plan, I can allow members about a minute more than they expected.
10:38
I make a serious point to the minister. If he says that the principle is to have overall support for a derogation, why cannot the same principle of overall support apply to transitional relief for other businesses that are affected, which include rural petrol stations? Such relief would have an impact on precisely those businesses.
Mr Purvis knows that the small business bonus scheme has delivered benefit to 66,000 businesses throughout Scotland. No party and no previous Government have made the efforts that we have made to support small businesses and particularly to benefit businesses in rural areas.
I return to fuel duty. I welcome the fact that Liam McArthur has initiated the debate again, although I regret that it appears to be an annual event. We have yet to see movement by the UK Government to recognise the concerns in remote rural and island areas of Scotland about the effect of fuel duty and of high fuel prices on those communities. As I said in the debate in April last year, the issue affects the people of Cumbria, Northumbria, Cornwall, Devon, Wales and other parts of the United Kingdom. I am sure that they will be interested in what we say.
As Liam McArthur said, as a high proportion of our population lives in rural and remote areas, the effect on such communities cannot be overestimated. A disproportionate burden is placed on households and businesses, particularly in these difficult economic times.
Liam McArthur acknowledged that we have again recently engaged by letter with the UK Government. He should not imagine that our engagement is limited to an exchange of letters. We regularly meet and have telephone conversations with ministers from the UK Administration. The subject is raised on a wide range of fronts and forms part of the dialogue that ministers for a range of portfolios present in speeches and at meetings with a wide range of people.
Writing to the chancellor is of course important to put formally on the record the need to reduce the fuel price differential between urban and rural households and businesses throughout Scotland.
I will try again. Will the member give way on that point?
It is nice to return from the recess to find that this lovely, friendly Parliament is turning into something of a bear pit. I hope that the debate does not progress in the same way as the previous one.
I welcome the fact that the Liberal Democrats have brought to the chamber a motion that allows us to talk about fuel prices, especially their impact on some of our rural and peripheral communities. Back in 1997, when we last had a Conservative Government, the UK major brand average pump price was only 61.7p per litre, according to the UK Petroleum Industry Association. As we speak, there is no shortage of places around Scotland where the price displayed on the forecourt is double that price.
Given the state of the public finances, it would be irresponsible of any member to make any commitment to reduce fuel duty at this stage, but—as has been mentioned—the UK Conservatives are consulting on the introduction of a fair fuel stabiliser. I admit that there are certain similarities between the proposal and proposals that other parties have made. The fair fuel stabiliser would ensure that the economy was less exposed to the instability of international oil markets and would keep prices at the pump more consistent. Under the proposal, fuel duty would fall when fuel prices went up. When fuel prices went down, fuel duty would rise again. The Government would save in the good times in order to help in the bad times.
The approach has a practical offer to make in relation to the road haulage industry and the costs to industries in peripheral areas that are associated with road haulage. I have talked to the industry and its representative organisations on many occasions. They indicate that the industry experiences two problems: first, the price of fuel; and secondly, the volatility of that price. If we address the volatility by creating some stability in fuel prices, we will deal with one of the problems from which the industry suffers. That is why we have approached the matter in this way.
Will the member take an intervention?
I will carry on for the moment.
I turn to the subject of business rates relief. The Scottish Conservatives have called on the Scottish Government to think again about the way in which filling stations in rural areas are subjected to business rates; I do so again today.
Will the member give way on that point?
No, I will not.
Not much has happened in the year since the previous Liberal Democrat debate on fuel duty, which was held on 30 April 2009. During that debate, I moved an amendment that called
“on the Scottish Government to report back to the Parliament on the extent to which a fuel duty derogation for rural areas would be permissible under EU law and what impact such a derogation would have on carbon emissions and the Scottish budget.”
Regrettably, that day the SNP and—yes—the Liberal Democrats voted against the amendment, which fell. It is somehow disingenuous for the Liberal Democrats to come to the chamber today bemoaning the lack of progress that has been made on finding a measure to reduce fuel prices in rural areas when this time last year they called a halt to the process of finding a solution. If we had received the advice for which the amendment called and knew today what it was, we would be in a position to progress the matter, had we not done so earlier.
The concept of a rural fuel derogation is attractive. It is essential that we realise that rural fuel prices and fuel prices throughout Scotland are geographically regressive. People in rural areas need to use more fuel because they travel further and more often. As we know, many people in difficult circumstances must run two cars when others in less rural areas would run only one. It is, therefore, essential that we address the issue. We look forward to taking the opportunity later today to vote for a combination of the motion and amendments.
I move amendment S3M-6142.1, to leave out from “and calls” to end and insert:
“as a result of the Liberal Democrats and the Scottish National Party voting against Conservative amendment S3M-4006.1 on 30 April 2009, which called on the Scottish Government to report back to the Parliament on the extent to which a fuel duty derogation for rural areas would be permissible under EU law and what impact such a derogation would have on carbon emissions and the Scottish Government, and welcomes the commitment of a future Conservative government at Westminster in relation to the introduction of a fair fuel stabiliser.”
10:51
I have only four minutes.
Vince Cable, as well as that boy Clegg whom we always see with him, supports high fuel prices for environmental reasons. In March 2008, Norman Baker—it was his turn that week to be the Liberal Democrats’ UK shadow transport spokesman—said:
“The problem with variable fuel duty is that it would be too difficult to operate.”
However, Labour will support the Liberal Democrat motion tonight—not just because Vince Cable once gave me a Werther’s Original or because the motion will not do any harm, unlike the Tory and SNP amendments, for reasons that I have already stated, but because Labour has an open mind about finding additional, practical measures to bring permanent mitigation of high fuel costs at the pump in remote communities. We want to build on the record of the previous, Labour-led Scottish Government, which developed the rural petrol stations grant scheme that has already afforded some mitigation.
Clearly, there is an on-going role for rates relief. I am surprised the minister did not mention it because I know that the convener wrote to him after this week’s meeting of the Transport, Infrastructure and Climate Change Committee, which endorsed the Scottish Government’s proposal to seek suggestions from island communities on other possible mitigation measures. I am at one with the minister’s emphasis on practicality. There is more than one way to skin a cat, as long as the cat gets skinned in the end.
Labour will take an active interest in the process of consulting island communities for additional suggestions.
Will the member give way?
The impact of fuel prices cannot be overestimated and the disproportionate impact on remote and rural areas has been acknowledged in the debate. Liam McArthur acknowledged that impact well.
Although it is predictable that, in a pre-election period, politicians who are not in power would seek to gain political advantage on the issue, there is no evidence to suggest that if any of those parties was in power, the situation would be radically improved any time soon.
The proposition that fuel duty is the cause of the problem and its solution is opportunistic and fundamentally dishonest. It conveniently ignores the uncertainty of currency fluctuations, crude oil costs, refining costs and distribution and marketing costs. If there is one certainty, it is that fuel is not more expensive in Shetland, Orkney or the Western Isles because of fuel duty, as the duty is the same right across the board.
Can Duncan McNeil tell me the difference in refining costs between fuel that is delivered to Stornoway and fuel that is delivered to Glasgow?
No, I cannot. Perhaps the minister will put the answer in SPICe if he knows it, but I cannot. The idea that distribution costs do not come into the equation is wrong. I am surprised that a transport minister would make such a frivolous intervention.
There is no doubt that people living in Shetland, Orkney or the Western Isles suffer a greater challenge when fuel prices peak. Not only the UK Government, the Scottish Government and EU institutions but the parties in this Parliament need to come together. We are all at one in recognising that, as an elected Parliament, we have a responsibility to come together and offer solutions rather than score points on the issue if we are to make progress on it in the longer term.
My purpose in taking part in the debate is of course to point out that the rising costs of fuel and the differentials in price in urban Scotland are also a bone of contention, not least in Inverclyde in my constituency, where we consistently pay above average to subsidise lower prices in other areas. Lack of competition is the issue there. That problem is recognised by the Competition Commission, which undertook a two-year inquiry into the situation and recommended a competition test, which aims to prevent one retailer from gaining a dominant position with larger stores in a local area to the detriment of consumers.
That recommendation was made to the Scottish Government six months ago and there has been no indication of progress or of a statement from the Government since then. There is an opportunity for the Government to show that it is serious about the rising costs of fuel by using its powers under planning legislation to enable the creation of local markets that would benefit consumers and, I hope, produce a level playing field that does not currently exist. To concede the possibility that the matter be dealt with under competition law—which, as we all know, is a reserved matter and, therefore, would be dealt with by the UK Government—would be a strange decision for an SNP Government.
I hope that the minister will be able to address some of the situation in his closing speech. I challenge the Scottish Government to begin formal consultation on the recommendation as soon as possible with a view to introducing a competition test under planning legislation. To do anything less would be to miss an opportunity to challenge the power of the large supermarkets. It is time for the SNP Government to do its bit to support hard-pressed motorists who are being ripped off at the petrol pumps.
11:10
The member should wind up.
The debate has had running through it a strand of agreement on the definition of the problem. I do not think that anyone has suggested that there are not problems in rural areas. That at least gives us a consistent basis on which to argue about what some of the solutions might be.
Agreement on the solutions is perhaps less widespread, but there is a consistent thread. Alex Johnstone highlighted the fact that, in 1997, the price of fuel was 61p a litre. As I look round the chamber, I think that I may be the only member present who remembers when it was half a crown a gallon.
I suspend the sitting for two minutes.
11:38
Meeting suspended.
11:40
On resuming—
What is the Liberal Democrat position on the increase in fuel duty that was introduced on 1 April, announced by the Chancellor of the Exchequer, Alistair Darling? Do the Liberal Democrats support or oppose it?
The case for our proposal is recognised across the board and was even recognised by some of Charlie Gordon’s colleagues when we last debated the subject. On that basis alone it deserves more serious consideration than it has been given by Labour ministers to date.
According to one Tory MP in a debate in the House of Commons last May:
“One could, however, make the argument ... that people pay more for beer in London and the south-east, so the taxation system should provide a London discount.”—[Official Report, House of Commons, 13 May 2009; vol 492, c 932.]
Given the surprise and outrage caused by his comments, it is perhaps fitting that the Tory MP in question goes by the name of Mr Gauke. No doubt Mr Johnstone is thinking what I am thinking and will wish to offer Mr Gauke some suggestions as to where he might like to deposit his London discount.
The fact remains that the Tories did not support our motion last year that called for a rural fuel derogation. They went on to vote against our proposal for a transitional relief scheme that would have assisted many small rural petrol stations clobbered by the eye-watering rises that they now face in their rates bills. Now, Tory candidates claim that they want fairer fuel prices and a better deal for struggling fuel providers. That simply will not wash.
Despite the Tories’ indifference, last April, the Parliament supported our motion that committed the Scottish Government to working with its UK counterparts
“to construct a derogation under the EU energy products directive”.
Petition PE1181, which Am Pàipear in Benbecula promoted, made a similar call. However, since last year’s vote, in which they supported our motion, the vigour with which the Scottish ministers have pursued the case has been somewhat underwhelming.
When the Scottish Parliament information centre contacted Scottish Government officials last Thursday, it was told that a letter from John Swinney to the UK Government on 14 November 2008 was
“the most recent action taken by Ministers on this issue.”
I acknowledge that it has since emerged that Mr Swinney wrote again to the chancellor last month and that he received a reply on 9 April. Perhaps that is further evidence of Government officials withholding information from SPICe—after the revelation in the debate on rates. Whatever is the case, that level of activity does not convey the urgency that one might expect from the Scottish Government. That is disappointing, not least because the Scottish Government has a strong case to make. The arguments that Mr Swinney marshalled in his letter of 19 March to Alistair Darling were excellently put. As Mr Swinney said,
“securing a rural fuel derogation”—
not a fuel regulator, of course—
“could go some way to offsetting the significantly higher fuel costs in rural Scotland and put consumers and businesses in such areas on a more equal footing with those in urban regions.”
Mr Swinney cited the example of France, which has been granted permission to apply a reduced duty rate in the region of Corsica, to argue that
“a similar arrangement in Scotland could help alleviate the price pressures faced by those communities most affected by high fuel costs.”
Indeed. Likewise, Greece and Portugal have used such a derogation under EU law. Despite supporting that approach in other EU member states, UK Labour ministers believe it to be too “administratively burdensome” to implement here. I am surely not alone in being puzzled—if not a little alarmed—by the notion that the Greek civil service and tax authorities are capable of managing such administrative complexity but those in the UK are not.
Lib Dems have led the campaign for a rural fuel duty derogation for several years. At Westminster, my colleagues have developed and sought to introduce a rural fuel discount scheme, which has precedent elsewhere in Europe. The case for such a derogation is compelling and based on the principle of fairness. Unlike the proposals that other parties have made, our approach—which NFU Scotland has this week supported—addresses the overall cost and the premium that those in remote rural and island areas pay.
The costs of such a scheme are modest, but not so the potential benefits to people who live and work in rural Scotland. Less than 3 per cent of the UK’s population lives in remote rural areas, but that figure is 10 per cent in Scotland. If we do not make the case for a fuel duty derogation consistently, persistently and with renewed urgency, we cannot expect others to do so for us.
I have pleasure in moving the motion. I move,
That the Parliament notes the AA report of 8 April 2010 that indicates that the average price of petrol in the United Kingdom has reached an all-time high and is likely to rise still further; recognises the high premium over the national average paid for fuel at filling stations in remote rural and, particularly, island communities; regrets the damaging financial and social impact that this has on individuals and businesses in these areas; further regrets the lack of progress that has been made on efforts to find a mechanism to reduce the price of fuel in specified remote rural and island areas of Scotland, and calls on the Scottish Government to hold urgent discussions with the UK Government and the European Commission to construct a mechanism, under the EU energy products directive or otherwise, to reduce the fuel price differential between remote rural and island communities and urban areas of the UK.
Despite Mr Purvis’s unhelpful intervention—he appears to have forgotten that the previous debate has been completed—let us unite around the idea that duty should be reduced.
It is helpful that the minister sets out the representations that have been made, but does he accept that the direct response to SPICe from Scottish Government officials was that the letter of 14 November 2008 was the most recent representation that the Government had made on the issue?
Not at the moment.
It is wrong to ignore the distinction between independent filling stations and those that are operated by big oil companies and large supermarkets. Independent retailers have less bargaining power, and it is unfair to assume that independently run filling stations operate at the same levels of profit as their larger rivals. We believe that, in the recent revaluation, business rates assessors have not taken that factor sufficiently into account in the case of filling stations and should look at the matter again. Hopefully, that would reduce business rates for independent filling stations across Scotland. It is essential that businesses that find themselves in such a position take the opportunity to appeal urgently.
Will the member give way?
The member is speaking about island communities. This morning, I spoke to my constituents on the Isle of Coll, where the price of petrol is £1.39 per litre.
Does the member believe that if we had the powers here, we would have different outcomes?
The member brought the debate to Parliament today, but 37 Liberal Democrat MPs voted for the UK budget, which included the fuel duty increases. Of those, 24 Liberal Democrat MPs, including some from Scotland, were not there to vote on behalf of their constituents. The hypocrisy of the Liberal Democrats in the chamber this morning is unbelievable.
It is true that a fuel duty regulator would be a welcome measure for the reasons that have been set out. It would help motorists by putting an end to the wild fluctuations in fuel prices, and it would help businesses, such as the road haulage industry and those in the fishing and farming sectors, by allowing them to plan their operating costs with some certainty. The other parties have failed to back such a regulator when given the chance, which undermines any shred of credibility that they have on fuel prices.
The latest example of that failure occurred earlier this week with the chancellor’s rejection of the Scottish Government’s call for a derogation for fuel prices in rural areas, which would recognise and mitigate the premium that remote locations pay for their fuel. Given that the Labour UK Government backed such measures for France, its opposition to implementing them here can only be described as utterly hypocritical. People in rural areas and the businesses that rely on fuel to operate deserve much better than that.
What is the difference between the SNP’s long-held fuel regulator policy and the Tories’—what do they call it?—fair fuel stabiliser? The Tories recognise that there is little difference. It is another example of the Johnnys-come-lately to sensible SNP policies.
Once again, the SNP’s consistency has been shown to be right. That is why the people of Scotland need the SNP as their champions in Westminster so long as we remain there.
11:05
It sounds to me as though Labour proposes a very scabby cat, if I may say so. We need to try to deal with the 90 island communities in Scotland. England may have only about six inhabited islands, but we have areas that are severely disadvantaged. Many of them are represented by people who have been seeking solutions to the problem for a long while.
It is welcome to have converts, as my colleague Maureen Watt said, but we must understand the chancellor’s argument about this issue a little more. He says in his letter to John Swinney on 9 April:
“I understand that fuel prices are typically higher than the UK average in remote or rural parts of the country, including the Highlands and Islands of Scotland, but this is not the result of the fuel duty regime, rather it is the product of market forces”.
Right. My contention at the Transport, Infrastructure and Climate Change Committee has been that market forces have failed. It is not a question of being able to have competition between two different petrol stations on islands, because the same supplier takes the fuel to the islands. Competition does not work, so we have to intervene by some means to ensure that market forces are dealt with.
I have suggested that we consider bulk buying by local councils in such areas. I proposed that for the Highland Council area, but John Laing, the councillor in charge of the council’s transport, environmental and community services committee, said that it would be too complicated. Well, I am sorry. It is an idea that people on islands want to be implemented. As the cabinet secretary is looking for ideas, I hope that that might be considered because, in certain areas, we must ensure that local petrol stations are supplied at competitive prices. If there has been a disadvantage of 10p in terms of fuel duty, that has not helped either, but intervening on the market is an important part of the solution.
The Transport, Infrastructure and Climate Change Committee threw out—or closed, we should say—a petition from the Western Isles because the Labour members and the Green convener considered that the wording of it was such that it could be closed because the cabinet secretary and the Government had been asked for their responses. I am sorry to say that it was closed despite the Liberal and two SNP committee members voting against that and for keeping the subject live.
If this debate is anything, it is a means to keep the issue alive and ensure that we find solutions. If there is good will, the first part of our approach must be to consider the proposed fuel duty regulator. We have had all the arguments about that.
If we are going to be four-square on the matter, the Liberal Democrat members from the Highlands and Islands in the UK Parliament have to stand on their feet and fight for this. So often, when it comes to a vote, they are not present. Yes, Sir Robert Smith has been present and Alan Reid was there for one of the most recent votes, but where were Charles Kennedy, Viscount Thurso, Alistair Carmichael and Danny Alexander? They were not there to vote. A regulator is precisely the kind of matter on which it is important for us to speak with one voice but, when it comes to the bit, the Liberal Democrats do not back us up. Their abstentions throughout the process have not helped, and although we wish to support their motion in principle, we look for more guts from them in the future.
11:15
The debate has been better tempered than the one that started the morning—at least, so far—perhaps because we are missing the running commentary from a sedentary position of Mr Tavish Scott, who has no doubt gone off to hone his witticisms for First Minister’s question time. We will find out shortly whether it was worth it, although from past experience I fear that we will be disappointed again.
We are grateful to the Liberal Democrats for giving us the opportunity to discuss the important issue of fuel prices. Many of us have been horrified to see the rising prices at the pump in the past few weeks, with prices of at least £1.20 a litre in many rural areas, and in some places much more. As was pointed out earlier, that has a major impact in rural areas where there is no realistic and affordable public transport alternative and the motor car is a necessity of modern life.
It is interesting that the Liberal Democrats have concentrated on
“a mechanism to reduce the price of fuel in specified remote rural and island areas of Scotland”.
Perhaps surprisingly, there was no mention in Mr McArthur’s opening remarks of Alistair Darling’s fuel duty hike, although Mr Rumbles subsequently referred to it. I am glad that he did, because I am genuinely confused about the Liberal Democrat position on fuel duty taxation. I had the misfortune to watch “The Politics Show” on BBC Scotland on 21 March and I enjoyed the sight of somebody called Nick Clegg, who is apparently the leader of the Liberal Democrats at Westminster, being asked to confirm the Liberal Democrat position on the fuel duty rise. He confirmed that Liberal Democrat policy was not to seek to reverse the increase.
Moments later on the same programme, we heard an interview with somebody called Danny Alexander, who apparently holds the elevated title of Mr Clegg’s chief of staff. Mr Alexander said:
“I don’t think that the Government should be pressing ahead with trying to increase fuel duty yet again in April with prices going up so far and so fast over the past few weeks.”
Glenn Campbell asked Mr Alexander:
“Do you want the Chancellor to postpone or cancel the planned increase from April 1st?”
Danny Alexander replied:
“Yes, I do.”
When it was put to Mr Alexander that that contradicted what his boss Mr Clegg had said a few moments before, he was left floundering and embarrassed. [Interruption.] Perhaps the Liberal Democrats who are here today could confirm the Liberal Democrat position on the rise, instead of shouting at me from their seats. Are they on Mr Clegg’s side or Mr Alexander’s side? The two are far apart.
Many more are going to close, and the Government must take some action on the matter.
11:21
Mr Gordon should not pretend that he is the same age as me and that he remembers that—it seems somewhat unlikely.
The fair fuel stabiliser that the Tories have proposed at least has the merit of providing an opportunity for discussion and debate. I note that Murdo Fraser said that there would be consultation on that idea. Ultimately, we should coalesce around whatever can be shown to work. That is the important thing.
Alex Johnstone mentioned that, according to road haulage interests, in essence the problem is the price of fuel and the volatility of that price. It is likely that we all agree on that. He highlighted the fact that independent filling stations have less buying power. That is where Duncan McNeil failed to grasp the nettle in relation to rural areas when he spoke about possible amendments to the planning system to increase competition. On many of our islands and in many of our remote communities, the issue is not competition. There is simply not the volume to support multiple outlets, and there never will be.
I fully accept that. I made it clear that I was making a plea for the situation that urban communities face to be addressed. When will the Scottish Government respond to the Competition Commission’s recommendation? Does the Scottish Government intend to progress it through planning legislation rather than competition legislation?
I will come to that in a minute, but I want to finish my remarks on what Alex Johnstone had to say. We did indeed vote against the Conservative amendment to the Liberal Democrat motion for the debate to which he referred on the basis that, as Liam McArthur described, it appeared to move the issue from centre stage.
I thought that Charlie Gordon was rather unwise to talk about the weakness of the pound making a significant contribution to high prices when the weakness of the pound is, of course, a reflection of the weakness of the economy over which the Labour Government has presided. We accept that there are global difficulties, but relative differences affect relative valuations of currencies. The pound has sunk against the dollar. That tells us that, in relative terms, the UK Administration has been less effective in engaging with the world’s economic problems.
Charlie Gordon talked about my role as transport minister. It is a great pleasure to stand before members as the UK’s longest-serving transport minister. There is a sense of déjà vu—we have had the reference to skinning a cat on previous occasions.
Mike Rumbles correctly made the important point that in rural areas, the purchase of fuel for cars and for goods transport is a necessity and not the luxury that the purchase of beer might be.
Reference has been made to the correspondence between John Swinney and Alistair Darling. I will quote from Alistair Darling’s letter of 9 April, in which he said:
“different fuel duty rates for some parts of the country would be administratively burdensome both for fuel sellers and for the Government.”
I do not think that that shows a willingness to engage constructively to solve the problem of rural fuel prices, as has been done elsewhere in the European Union. It can be done: if the Greeks can do it, I hope that the UK Government can do it.
I turn briefly to the competition issue that Duncan McNeil raised. One of the great difficulties of saying when planning permission is granted that a filling station may be operated only by, for the sake of argument, Shell, because BP runs all the other filling stations in the area, is that that would reduce the economic value of Shell’s investment, because it would be forbidden from selling the filling station to another operator. In saying that, one would make development less likely. However, if one is blind to the company that makes a planning application—that is a principle of the current planning system—there is nothing to stop the planning permission being transferred to someone else. That would be the case even if account were taken of the company that made the application.
It is important to understand that refining costs are the same, wherever in Scotland fuel is sold.
It has been a good debate, in which we have been united in defining the problem in a similar way. Rural areas of Scotland have substantially higher fuel prices than urban areas do. I hope that the debate has illuminated some of the issues and opportunities that exist, and that all members will unite with political colleagues in other jurisdictions in their efforts to remedy the situation.
11:31
On behalf of my constituents who, like those of Liam McArthur and other members, face crippling prices, I thank colleagues for what has been a relatively thoughtful and consensual debate.
Some thought-provoking speeches have been made in a truly constructive spirit. I accept that Duncan McNeil’s points on planning at least bear some examination. Such work lies before us. I note and am grateful for Charlie Gordon’s conciliatory remarks, in which he looked forward to how we might make progress on the issue in future.
As all members have said, the price of fuel has a huge impact. For my constituents, it affects everything from the price of a tube of toothpaste to the price of a fence post. It affects the cost of public services and our ability to deliver them. It affects crofting, agriculture and tourism. What drives people who care about the issue is that its effect comes right down to the price of a pensioner’s supermarket basket of messages, to which it adds. It affects people on the lowest incomes.
I want to make specific reference to my constituency. Setting aside the context of the problems that are faced across the board in the UK, we face the challenge that the continuing decommissioning of Dounreay presents us with of putting in place suitably high-quality replacement employment opportunities. In that regard, the crippling price of fuel militates strongly against the best efforts of Government, its agencies and individuals who care about the issue.
I will paint in the background scene to the problems that we face. The taking out of the post bus service on the north coast is an issue that members and the minister have heard me talk about on many occasions. That illustrates the fact that public transport is not available to replace the use of cars, which is essential. Sadly, we still see rural petrol stations closing. The one at Helmsdale stands empty and unused. Those factors form part of the background to the situation.
I accept that prices are very high in Liam McArthur’s constituency and on the island of Coll, but in Thurso unleaded fuel costs £1.29 a litre and prices in Caithness vary between £1.24 and £1.29 a litre. In my constituency, distance is a huge issue. In the context of Scotland’s land mass, the distances that my constituents have to travel to filling stations to fill up with the motor fuel that is essential to them and without which they cannot function are among the biggest in the country. They are paying an extra tax because of the fuel that they have to use to go and fill up.
As members will know, my colleague in Westminster, John Thurso, brought forward a paper that illustrates and fleshes out what Liam McArthur’s motion speaks about—an area-based derogation. The paper is detailed and is now a matter of record in Westminster.
It has been a year since this Parliament had an opportunity to debate fuel duty and the disproportionate impact that higher fuel costs have on Scotland’s rural communities. Again, today, it is the Scottish Liberal Democrats who lead the debate.
As last week’s report by the Automobile Association highlighted, fuel costs nationwide are now at an all-time high, so this debate could not be more timely. In the AA’s report, Stromness in my constituency came out top of the pile at £1.30 per litre. That represents a 40 per cent increase over 2005 prices. Worrying though that undoubtedly is, not least because it is an upward trend that looks set to continue, the AA report rather glosses over the fact that in more remote rural parishes, and certainly in outlying islands, prices at the pumps are higher still. In effect, our remote rural and island communities face a triple whammy: higher fuel prices, longer distances and little or no public transport alternative.
In the unlikely event that the Liberal Democrats are in a coalition after the UK general election, will insistence on the measure proposed by the member be a deal breaker for his party?
I assure Parliament that we can make common cause on the issue with our colleagues in the Liberal party. Liam McArthur talked of a rural fuel derogation, which is a broad term that encompasses a range of possible options. Let us not become unduly fixated on how to do that—let us unite around the principle that it must be done.
As with transitional relief?
I am certainly happy to explore why SPICe had that view, but Liam McArthur should be aware that not all correspondence between the Government and the UK Administration is necessarily or routinely put before SPICe. I am happy to ensure that members are well aware of our activity on the subject and I hope that the debate and my speech have provided clarity.
It is important to examine the evidence of the disparity in fuel pricing between rural and urban areas. Mr McArthur is of course aware that a disparity of about 10p exists between prices in Kirkwall and in Glasgow. That varies from day to day and week to week, but it endures and is of that order. Similarly, the Western Isles and the Shetlands have large burdens from the cost of fuel.
The purchase of beer was referred to. I am sure that that is more expensive in London, but it is a voluntary purchase, whereas the provision of fuel for vital rural services is not a discretionary buy for businesses or people who must travel to their work and transport themselves around. Throughout Scotland, we must all consider whether every journey is necessary. However, when the public transport options are fewer—as they inevitably are in rural areas—fewer journeys are discretionary and more are necessary, so more are affected by the high taxation regime.
The latest letter to the chancellor, which was sent on 19 March, asked him to reconsider his decision not to take corrective action through the tax system. Any derogation of whatever character—be it that proposed by the Conservatives or by us or the Liberals’ variant—would do if it delivered the result. I am not partisan about that. A derogation would make a difference and put rural areas on a more equal footing with urban areas, which would reduce the competitive barriers of high fuel prices.
The chancellor’s latest rejection has let down thousands of households and businesses in remote parts of Scotland that face high fuel costs, despite the actions—to which Liam McArthur referred, as other members no doubt will—that have been permitted throughout the European Union in places where national Administrations have made and argued the case for them. I refer, in particular, to the example of Corsica, an island that is greatly affected by high fuel prices and is now benefiting from the actions of the French Government.
With the price of petrol having risen by 27 per cent in the year to March 2010, it is important that we get the early action that is needed. There has been a change in the way in which increases are phased, but there will still be increases. It is time for action. On behalf of my party, I will support the Liberals’ motion and my amendment.
I move amendment S3M-6142.2, after second “mechanism” to insert:
“, including consideration of a fair fuel regulator”.
10:45
We welcome the debate. This is the third spring in a row in which the Scottish Parliament has debated fuel prices. We acknowledge that high fuel prices are of long-standing concern to Scotland’s remote communities. There can be increased hardship in such communities when further spikes in fuel prices affect people who often have no public transport alternative to car use or no access to mainstream networks for domestic energy and whose other living costs are adversely affected by high distribution costs.
If we take the view that the reserved issue of fuel duty and the associated issue of value added tax, set by the UK Treasury at standard rates throughout the UK, must be derogated in some form in Scotland’s remote communities, we can consider the Tories’ fuel duty stabiliser, the SNP’s fuel duty regulator and the Liberal Democrats’ press release. The problem with the stabiliser and regulator models is that, although both are based on the principle that fuel duty should go down when the price of fuel goes up, there is no guarantee that retailers would pass on the benefits of lower duty via prices at the pump. Of course, when oil prices dropped, fuel duty would rise again. In focusing on duty, we should not ignore other, global factors, such as the current relative weakness of the pound against the US dollar.
The latest Liberal Democrat push includes Tavish Scott’s so-called Highland manifesto, in which he spoke out on the issue. Surely Angus, the Borders or, for that matter, Cornwall or the Norfolk fens are not to be ignored in the Liberals’ outpourings?
That is a good illustration of the problem. I have happy memories of Coll and all that I was able to assist them with when I was convener of Strathclyde Regional Council’s roads and transport committee in a previous incarnation.
We will take an active interest in the new process that focuses first on the worst-affected communities, such as Coll, and we will keep an open mind on further mitigation that is practical, permanent and at the pump. We will leave the posturing to others. There must be an election somewhere.
10:56
The fundamental problem with fuel duty for many of my constituents, particularly those in west Aberdeenshire, is that the car is a necessity, not a luxury.
At the start of the debate, the Tories had the nerve to ask whether the Liberal Democrats voted for or against the increase in fuel duty resulting from the UK budget. Just to enlighten my Conservative colleagues, I say that, in the vote on the recent budget, my Westminster colleague Robert Smith, together with 42 other Liberal Democrats, voted against the measures to increase fuel duty, while only one Conservative, the member for the Vale of York, joined them. All the other Conservative MPs either absented themselves from the vote or abstained. I thought that I should make that point to the deputy leader of the Tories.
I will give way in a moment.
What I find particularly galling is the ignorance of many Conservative MPs on the issue of fuel duty. We have already heard how, last May, one Tory MP, David Gauke, compared the problems caused by fuel duty for people who live in remote and rural areas, such as my own, to those caused by the duty on beer in London. The Conservatives just do not understand that, unlike beer, fuel is a vital lifeline product for many of my constituents.
The Conservative position on rural petrol stations is equally galling. Alex Johnstone would not give way to me when he was making his speech, so I will reply to him now. Alex Johnstone cannot say that he advocates relief for our rural petrol stations when he voted against such relief as recently as three weeks ago. Alex Johnstone is standing for election to another place and he says to people in my constituency that he supports help for rural petrol stations, but he voted against it in the Parliament. We cannot have that level of hypocrisy in the Scottish Parliament. He and his Conservative colleagues voted against a Liberal Democrat amendment instructing the Scottish Government to implement a business rates relief scheme. Such hypocrisy brings politics and politicians into disrepute. When the Conservatives had the chance to help our rural petrol stations by supporting a transitional rates relief scheme, they fluffed it, and they will fluff it again in tonight’s vote. They did not have the courage of their convictions. Just because the Liberal Democrats proposed it, they decided to vote against it, hoping that no one would notice. That level of hypocrisy on the part of the Conservatives has to be seen to be believed.
We need a derogation for rural areas from the worst effects of fuel duty. The Liberal Democrats advocate that with a passion. The European Commission allows it. It already happens in France, Portugal and Greece, and it could happen here, if only the Conservatives would vote for it.
Why is the UK Government so reluctant to do it? Is it because such a derogation would affect only 3 per cent of the UK’s population? If that is the case, it is a shameful neglect of Scottish interests, as it would affect more than 10 per cent of the Scottish population. A derogation from fuel duty for our rural areas would be a real help for people who, I emphasise, need to use their cars.
I certainly believe that if the Liberal Democrats were in power in Westminster—of course, everyone has the opportunity to vote Liberal Democrat on 6 May—we would have such opportunities. We do not need any change in powers per se to achieve that if we get the right result on 6 May.
It would be particularly helpful to my constituents in west Aberdeenshire, for whom I speak here. Out of necessity, that area has the highest level of car ownership in the country because of its difficulties with public transport.
I urge the Conservatives in particular to get real, to put petty politics behind them and to vote for a solution to rising fuel prices for our rural motorists, who have no option but to use their cars as essential tools for modern living.
11:01
This is a timely debate, given that petrol prices are at the forefront of many people’s minds because of the recent price increase. The first part of the Liberal Democrat motion has little in it that one can disagree with.
The SNP has long championed the case of people who live in rural communities where remoteness and lack of public transport make a car a necessity rather than a personal choice. With fuel duty due to rise again by 2.76p in the current financial year, it is the rural motorist who will pay the heaviest price. The situation is totally unfair, and I know that the SNP group at Westminster has tried repeatedly to change it. While the current Liberal Democrat claims of support for the SNP’s position on fuel prices are welcome, it is a shame that they have not been backed up by action when the Liberal Democrats have had the opportunity to make a difference to people who live in rural areas. The situation of Liberal Democrat elected representatives in rural Scotland is often made completely untenable by the utterances of their London-based colleagues, who construct their policies from a London perspective.
In 2009, Liberal Democrat MPs voted to increase the money that people must pay in fuel duty, but every time the SNP has tried to introduce a fuel regulator into Westminster’s budget, they have failed to support it. As ever, it is a case of the Liberal Democrats saying one thing to their electorate and ignoring it when it is time to take action.
I have already set out the shortcomings in the SNP’s fuel regulator, which might explain why my MP colleagues voted against it. Will the member explain why SNP MPs did not press to a vote the tax rises that were announced last September?
It is always a delight to take part in debates that reflect the rural and island communities, on which this debate focuses. I am sorry that none of the rural and island members from the Labour Party has been here to take part, but I am not surprised because their position is entirely untenable.
Richard Simpson said on “Brian Taylor’s Big Debate” in Aviemore just before the SNP conference that the fuel escalator should continue. That was a central belt member speaking in the Highlands and telling us that the London Government’s fuel duty should continue to rise. In other words, it was the exact opposite of trying to find solutions, which Charlie Gordon tried to suggest today Labour wants to do.
I pointed out that there is more than one way to skin a cat and that the mitigation that we all claim to seek will not necessarily come through changing fuel duty.
If the deputy leader of the Conservative party had listened to the debate, he would know that I have already said that 43 Liberal Democrat MPs voted against the budget increases in fuel duty. We do not want to see them. It is quite different from Nick Clegg turning around and saying, “Well, we voted against it.” It is a completely consistent approach from our MPs.
If that was supposed to provide clarity in the debate, it was an absolute joke. None of us is any the wiser as to the Liberal Democrat position. Nick Clegg says, “We can’t reverse it.” Danny Alexander says, “Yes, we can.” For goodness’ sake, let them make up their minds.
For our part, the Conservatives are clear that measures need to be taken to help to protect those who live in rural Scotland, in particular, from the impact of rising fuel prices. As Alex Johnstone pointed out, we have said that we will consult on the introduction of a fair fuel stabiliser to help to keep prices at the pump more consistent. Our proposal was warmly supported by Edmund King, the president of the AA, who said:
“It is right that political parties are addressing the problem of fuel duty now we have record prices at the pumps.”
A major advantage of our proposed fair fuel stabiliser is that, unlike with the Liberal Democrats’ proposal, there is no doubt about its legality. As we have heard, both today and in earlier debates on the subject, there are questions about the legality of having a derogation in different parts of Scotland. Surely we should concentrate on what we know we can do rather than on what might be possible. It is a pity that, in the year that has passed since our previous debate on the issue, the Liberal Democrats are no further forward on trying to convince us about the legal position on a derogation. They would have been more convincing in this morning’s debate if they had done that.
Another dimension to the debate about fuel that has become particularly acute in recent weeks is the business rates that are paid by filling stations in rural areas. That, too, was mentioned earlier. Just before the recess, the transport minister, Mr Stevenson, told me in the chamber that we have lost a third of the rural petrol stations in Scotland in the past 10 years.
It has been a reasonably good debate. As I said, this is the third year in a row that we have discussed the subject. Let us hope that we make some practical progress before this time next year.
Liam McArthur posed the issues fairly well and in a fairly balanced way. It is the generic issue of mitigation—or, if you will, derogation—that was the focus of the serious aspects of the debate. Stewart Stevenson, my usually conscientious adversary, departed from his standards later in the debate, in his intervention on Duncan McNeil about refining costs. A recent SPICe briefing on the issue for the Public Petitions Committee identifies refining costs as one of five principal factors in the problem. Perhaps the minister was trying to make a more obscure point—that has been known on his part—but he can clear that up when he sums up.
I will own up. I like Alex Johnstone of the Tories too, and not just because, like me, he is a transport spokesperson. There was something about him this morning that seemed to infuriate Mike Rumbles. I thought that Maureen Watt rather phoned it in. Duncan McNeil made the interesting suggestion that land use and planning might be one possible route for bringing additional mitigation to bear.
I will be scrupulously fair to Rob Gibson, who reiterated the point that he made in the Transport, Infrastructure and Climate Change Committee earlier this week that local market failure is at work, which is a distinct issue from that of fuel duty itself. He made an interesting practical suggestion about bulk buying, but he came dangerously close to misleading the Parliament about what was decided by the committee earlier this week. Although we technically closed down a petition, that does not mean that the committee closed down the issue—far from it. Sadly, the convener of the committee is no longer present, but I quote from his letter of 14 April to John Swinney about what was decided in committee:
“The Committee has now concluded its consideration of Petition PE1181”—
incidentally, the committee considered the petition three times—
“but will continue to maintain an interest in the issue of high fuel prices in rural and island communities. I would be grateful if you could undertake to inform the Committee, on an ongoing basis, of any significant developments on this subject.”
It is not helpful, either, to cast aspersions about the nature of constituencies that members represent. I make no apology for being a constituency MSP for Scotland’s largest city, but I am also Labour’s transport spokesperson. I think the issue is important, and that is why I am here.
I hope that, when we have another debate on the subject next year, we will be able to say honestly to people who are adversely affected by the problem, “In the past year, we have made real progress with additional mitigation.”
11:25
I remember when lager was half a crown a pint.
On the subject of an area-based derogation, I notice that there is a reference in the motion to
“a mechanism to reduce the price of fuel in specified remote rural and island areas of Scotland”.
Will the member enlighten us as to where the boundaries between such areas would exist and which areas he hopes would benefit from such a scheme?
Of course, that would have to be decided as the scheme was introduced, but the boundaries would surely be based on the areas of greatest need. That crystallises something of the difference that lies at the heart of what we are debating. As a party, we are unashamedly saying that any scheme should be area based and should target the people who face the most crippling prices. I accept that other parties are making other suggestions, but there is a difference between the broad-brush approach that would affect the whole of Scotland and the more directly targeted approach. However, it is right and proper that we should debate the issue, and I welcome the fact that we are talking about it today.
When John Thurso was a member of the Treasury Select Committee, he put it to the then Chancellor of the Exchequer that such a derogation should be looked at. He received a flat refusal, but for the record I say that the Treasury has accepted more recently that it should at least be considered. We will see what comes back from that.
As Liam McArthur has said, derogation works in an EU context. France uses such a scheme for the island of Corsica, and in EU law it is absolutely workable. To that extent, we say that we should just pick up something that is proven to work and look at how we could introduce it in Scotland. To that end, I have written to the EU to ask for the details of how derogations are applied in parts of the EU. I await the reply with the greatest of interest.
It is my considered view that a mark of a civilised society is how it treats its disadvantaged members. I put it to the chamber that my constituents are being greatly disadvantaged by prices that they simply cannot afford for what is a necessity of life. The question is whether the Government will simply allow outlying communities to wither and die—I sincerely hope that it will not—or whether it will show imaginative support that will allow future generations to live, work and rear families in my constituency.
We have a workable scheme. I accept that there will be a debate with other parties about their schemes, but at least there will be that debate. I believe that we have a recognition throughout the chamber today of the severe nature of the problem that my constituents face. I hope that we can all coalesce around my colleague Liam McArthur’s excellent motion.